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| Rule |
Rule 5703-25-01 | Public notice of any proposed change in rules.
(A) In addition to other notification
procedures prescribed by law, notice of the proposed adoption, amendment, or
rescission of any rule of the department of taxation under Chapter 5703-25 of
the Administrative Code shall be given as provided in this rule. (B) Notice under this rule shall be given
in any manner the department of taxation considers appropriate at least thirty
days prior to the day the proposed adoption, amendment or rescission of a rule
described in paragraph (A) of this rule is filed with the joint committee on
agency rule review under division (H) of section 119.03 of the Revised Code to
the following: (1) To the county
auditor, treasurer, prosecuting attorney, and board of commissioners of each
Ohio county and to their state-wide organizations; (2) To appraisal firms
and individual appraisers who have filed documents with the tax commissioner
for the current year under paragraph (J) of rule 5703-25-08 of the
Administrative Code at the time the public notice under this rule is
given; (3) To any person or
organization who requests in writing to have such notice. (C) The notice under this rule shall
contain the following information: (1) A statement of the
tax department's intention to consider adopting, amending or rescinding a
rule; (2) A synopsis of the
proposed rule, amendment or rule to be rescinded or a general statement of the
subject matter to which the proposed rule, amendment or rescission
relates; (3) A statement of the
reason or purpose for adopting, amending or rescinding the rule; (4) A statement that a
copy of the full text of the proposed rule, amendment, or rule to be rescinded
will be made available, upon request and without cost, to everyone to whom
notice is given under paragraph (B) of this rule; (5) A statement that
comments concerning the proposed rule, amendment or rule to be rescinded may be
directed to the department of taxation, in writing, before the rule is
submitted to the joint committee on agency rule review.
Last updated July 1, 2021 at 11:25 AM
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Rule 5703-25-05 | Definitions.
As used in rules 5703-25-05 to 5703-25-17 of the
Administrative Code: (A) "True value in money" or
"true value" means one of the following: (1) The fair market value
or current market value of property and is the price at which property should
change hands on the open market between a willing buyer and a willing seller,
neither being under any compulsion to buy or to sell and both having a
knowledge of all the relevant facts. (2) The price at which
property did change hands under the conditions described in section 5713.03 of
the Revised Code, within a reasonable length of time either before or after the
tax lien date, unless subsequent to the sale the property loses value due to
some casualty or an improvement is added to the property. (B) In compliance with the provisions of
sections 5713.01, 5713.03, 5715.01 and 5715.24 of the Revised Code, the
"taxable value" of each parcel of real property and the improvements
thereon shall be thirty-five per cent of the "true value in money" of
said parcel as of tax lien date in the year in which the county's
sexennial reappraisal is or was to be effective beginning with the tax year
1978 and thereafter or in the third calendar year following the year in which a
sexennial reappraisal is completed beginning with the tax year
1978. (C) "Computer assisted appraisal
systems" - A method in which the value of a property is derived by any or
all of the following computerized procedures: (1) Multiple regression
analysis using sales to form the data base for valuation models to be applied
to similar properties within the county. (2) Computerized cost
approach using building cost and other factors to value properties by the cost
approach as defined in this rule. (3) Computerized market
data approach where a subject property is valued by adjusting comparable sales
to subject by adjustments based on regression or other analyses. (4) Computerized income
approach using economic and income factors to estimate value of
properties. (5) Computerized market
analysis to provide trend factors used by appraisers as basis of market
valuation. (D) "Cost approach" - A method
in which the value of a property is derived by estimating the replacement or
reproduction cost of the improvements; deducting therefrom the estimated
physical depreciation and all forms of obsolescence if any; and then adding the
market value of the land. This approach is based upon the assumption that the
reproduction cost new normally sets the upper limit of building value provided
that the improvement represents the highest and best use of the
land. (E) "Effective tax rate" - Real
property taxes actually paid expressed as a percentage rate in terms of actual
true or market value rather than the statutory rate expressed as mills levied
on taxable or assessed value. In Ohio four factors must be considered in
arriving at the effective tax rate: (1) The statutory rate in
mills; (2) The composite tax
reduction factor as calculated and applied under section 319.301 of the Revised
Code; (3) The percentage
rollback prescribed by section 319.302 of the Revised Code; (4) The prescribed
assessment level of thirty-five per cent of true or market value. (F) "Income approach" - An
appraisal technique in which the anticipated net income is processed to
indicate the capital amount of the investment which produces the net income.
The reliability of this technique is dependent upon four
conditions: (1) The reasonableness of
the estimate of the anticipated net annual incomes; (2) The duration of the
net annual income, usually the economic life of the building; (3) The capitalization
(discount) rate; (4) The method of
conversion (income to capital). (G) "Market data approach" - An
appraisal technique in which the market value estimate is predicated upon
prices paid in actual market transactions and current listings, the former
fixing the lower limit of value in a static or advancing market (price wise),
and fixing the higher limit of value in a declining market; and the latter
fixing the higher limit in any market. It is a process of correlation and
analysis of similar recently sold properties. The reliability of this technique
is dependent upon: (1) The degree of
comparability of each property with the property under appraisal; (2) The time of
sale; (3) The verification of
the sale data; (4) The absence of
unusual conditions affecting the sale. (H) "Qualified project manager"
has the same meaning as division (A)(2) of section 5713.012 of the Revised
Code. (I) "Replacement cost" (1) The cost that would
be incurred in acquiring an equally desirable substitute property; (2) The cost of
reproduction new, on the basis of current prices, of a property having a
utility equivalent to the one being appraised. It may or may not be the cost of
a replica property; (3) The cost of replacing
unit parts of a structure to maintain it in its highest economic operating
condition.
Last updated July 1, 2021 at 11:25 AM
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Rule 5703-25-06 | Equalization procedures.
Effective:
October 20, 2023
(A) "True value in money" will
be determined, in the first instance, by the county auditor as the assessor of
real property in the county on consideration of all facts tending to indicate
the current or fair market value of the fee simple estate, as if unencumbered
of property including, but not limited to, the physical nature and construction
of the property, its adaptation and availability for the purpose for which it
was acquired or constructed or for the purpose for which it is or may be used,
its actual cost, the method and terms of financing its acquisition, its value
as indicated by reproduction cost less physical depreciation and all forms of
obsolescence if any, its replacement cost, and its rental income-producing
capacity, if any. The auditor will likewise take into consideration the
location of the property and the fair market value of similar properties in the
same locality. (B) At least once each six-year period
the county auditor of each county, in conformity with the provisions of section
5713.01 of the Revised Code, will view and appraise each parcel of real
property and the improvements thereon in the county and this appraisal will
reflect the one hundred per cent true value in money of each parcel appraised,
and the auditor will place each parcel of real property on the tax duplicate at
its "taxable value" which is thirty-five per cent of its true value
in money. (C) In the update year the county auditor
will determine whether each parcel of real property and the improvements
thereon is appraised at its true value in money, as defined in paragraph (A) of
rule 5705-25-05 of the Administrative Code, as of tax lien date of said year.
If the auditor finds that there has been either an increase or decrease in
value, the auditor will adjust the tax records to show the true value in money
of each parcel and the improvements thereon as well as the "taxable
value" thereof, which "taxable value" will be thirty-five per
cent of the true value in money thereof as redetermined by the county auditor
as of tax lien date. (D) In making this triennial update of
the true value in money and the "taxable value" of each parcel of
real property, the county auditor will be guided by sales of comparable
property for a like use; the sales ratio and other related studies compiled by
the tax commissioner for the three calendar years immediately preceding the
update year; by the increase or decrease in current building costs and changes
in construction technique both after the proper application of depreciation and
obsolescence; by the increase or decrease in the net rental income, expenses,
and services for comparable property since the year in which the preceding
sexennial reappraisal had been completed; and such other indications of
increase or decrease in value as may be pertinent, such as test or sample
appraisals on a current basis, where sales of real property are limited or in
question. (E) In implementing any increase or
decrease in valuation of real property pursuant to this rule or ordered by the
tax commissioner pursuant to section 5715.24 of the Revised Code, the county
auditor will, when practicable, increase or decrease the taxable valuation of
parcels in accordance with actual changes in valuation of real property which
occur in different subdivisions, neighborhoods, or among classes of real
property in the county. The auditor may increase or decrease the true or
taxable value of any lot or parcel of real estate in any township, municipal
corporation, or other taxing district by an amount which will cause all real
property on the tax list to be valued as required by law, or the auditor may
increase or decrease the aggregate value of all real property, or any class of
real property, in the county, township, municipal corporation, or other taxing
district, or in any ward or other division of a municipal corporation by a per
cent or amount which will cause all property to be properly valued and assessed
for taxation in accordance with section 36, Article II and section 2, Article
XII, Ohio Constitution, and sections 5713.03 and 5715.01 of the Revised Code,
and this rule. (F) In determining the true value in the
year of the sexennial reappraisal or update year of any tract, lot, or parcel
of real estate if such tract, lot or parcel has been the subject of an
arm's length sale between a willing seller and a willing buyer within a
reasonable length of time, either before or after the tax lien date, the
auditor may consider the sale price of such tract, lot, or parcel to be the
true value for taxation purposes. However, the sale price in an arm's
length transaction between a willing seller and a willing buyer will not be
considered the true value of the property sold if subsequent to the
sale: (1) The tract, lot, or
parcel of real estate loses value due to some casualty; (2) An improvement is
added to the property. (G) The lien for taxes attaches to all
real property on the first day of January. If a building, structure, fixture or
other improvement to land is under construction on January first of any year,
its valuation will be based upon its value or percentage of completion as it
existed on January first. (H) When the county auditor revalues real
property, notifications of the change in value will be made as provided in
section 5713.01 of the Revised Code.
Last updated October 20, 2023 at 1:51 AM
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Rule 5703-25-07 | Appraisals.
Effective:
October 20, 2023
(A) Each general reappraisal of real
property in a county will be initiated by an entry and order of the tax
commissioner directed to the county auditor of the county concerned which will
specify the time for beginning and completing the appraisal as provided by
section 5715.34 of the Revised Code. In January of each year the commissioner
will adopt a journal entry wherein is set forth the status of reappraisals in
the various counties and the tax year upon which the next reappraisal and the
next triennial update of real property values in each county will be
completed. (B) Each lot, tract, or parcel of land,
and all buildings, structures, fixtures, and improvements to land will be
appraised by the county auditor according to true value in money, as it or they
existed on tax lien date of the year in which the property is appraised. It
will be the duty of the county auditor to so value and appraise the land and
improvements to land that when the two separate values for land and
improvements are added together, the resulting value indicates the true value
in money of the entire property. (C) Land will be valued in accordance
with the provision of rule 5703-25-11 of the Administrative Code. All land will
be valued according to its true value except where the owner has filed an
application under section 5713.31 of the Revised Code for such land to be
valued for real property tax purposes at the current value the land has for
agricultural use, and the land is qualified to be so valued and taxed as
provided in section 5713.30 of the Revised Code. Buildings, structures, fixtures, and improvements
to land will be valued in accordance with the provisions of rule 5703-25-12 of
the Administrative Code. (D) In arriving at the estimate of true
value the county auditor may consider the use of any or all of the recognized
three approaches to value: (1) The market data
approach - The value of the property is estimated on the basis of recent sales
of comparable properties in the market area after allowance for variation in
features or conditions. The use of the gross rent multiplier is an adaptation
of the market approach useful in appraising rental properties such as
apartments. This is most applicable to the types of property that are sold
often. (2) The income approach -
The value is estimated by capitalizing the net income after expenses, including
normal vacancies and credit losses. While the contract rental or lease of a
given property is to be considered the current economic rent should be given
weight. Expenses should be examined for extraordinary items. In making
appraisals by the income approach for tax purposes in Ohio provision for
expenses for real property taxes should be made by calculating the effective
tax rate in the given tax district as defined in paragraph (E) of rule
5703-25-05 of the Administrative Code, and adding the result to the basic
interest and capitalization rate. Interest and capitalization rates should be
determined from market data allowing for current returns on mortgages and
equities. The income approach should be used for any type of property where
rental income or income attributed to the real property is a major factor in
determining value. The value should consider both the value of the leased fee
and the leasehold. (3) The cost approach -
The value is estimated by adding to the land value, as determined by the market
data or other approach, the depreciated cost of the improvements to land. In
some types of special purpose properties where there is a lack of comparable
sales or income information this is the only approach. Due to the difficulties
in estimating accrued depreciation, older or obsolete buildings value estimates
often vary from the market indications. (E) Ideally, all three approaches should
be used but due to cost and time limitations, the cost approach as set forth in
these rules is generally an appropriate first step in valuation for tax
purposes. Values obtained by the cost approach should always be checked by the
use of at least one of the other approaches if possible. In the event the
auditor uses approaches of estimating true value other than the cost approach
appropriate notations will be shown on the property record. (F) The appraiser is urged to refer to
standard appraisal references as well as the excellent publications by many
trade associations, etc., which provide valuable income, expense, and other
types of information that may be used as benchmarks in making the
appraisal. (G) Nothing set out in these rules will
be construed to prohibit the county auditor from the use of advanced
techniques, such as computer assisted appraisals, in the application of the
three approaches to the appraisal of real property for tax purposes. However,
such programs must be submitted to the tax commissioner for the approval on an
individual basis.
Last updated October 20, 2023 at 1:51 AM
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Rule 5703-25-08 | Procedure prior to actual appraisal.
(A) Before commencing the appraisal, reappraisal, or revaluation
of real property for the tax purposes in connection with a sexennial
reappraisal, triennial update, or for annual maintenance each county auditor is
required to appoint and employ the experts, deputies, clerks or other employees
as the auditor deems necessary in the performance of the auditor's duties as
assessor with the approval of the tax commissioner. The tax commissioner hereby
grants such general approval. All such employees shall be appointed as deputies
under the provisions of section 319.05 of the Revised Code. The tax
commissioner may order any particular county auditor to seek, in writing, prior
approval from the tax commissioner to appoint and employ any such experts,
deputies, clerks or other employees, as the tax commissioner deems necessary,
in the manner and for the time period the tax commissioner
prescribes. (B) A county auditor proposing to make an in-house sexennial
reappraisal shall first prepare a detailed plan for making such appraisal which
shall include, but is not limited to, the following provisions: (1) Outline of appraisal procedure to be followed. (2) Number of persons to be employed. (3) The names and addresses of key persons and supervisors to be
employed and their qualifications. (4) Compensation and salaries to be paid and estimate of total
cost. (5) Period of employment. (6) The date actual appraisal work is to begin. (7) Date of completion of the appraisal, and the specific tax
year for which the appraised values shall be placed on the tax
duplicate. (C) Such plan shall be prepared in duplicate, one copy to be kept
in the office of the auditor and open to public inspection, and one copy to be
filed with the department of taxation as a part of the foregoing application.
Such plan, after being approved by the tax commissioner, shall not be departed
from and there shall be no changes or alterations of the same without the
written approval of an application to the tax commissioner setting forth
specifically the changes, alterations, additions or subtractions requested by
the county auditor. (D) Progress of work reports shall be made during the course of
the appraisal as determined and requested by the tax commissioner. (E) A county auditor proposing to employ professional appraisal
firms or an individual appraiser to make a complete or partial appraisal,
either for a sexennial reappraisal, triennial update, or for annual
maintenance, is required to request and obtain approval of the tax commissioner
of any contract entered into with such appraisal firm and to file a copy of
such contract with the tax commissioner as a part of the application of the
county auditor to commence an appraisal, reappraisal or revaluation of real
property for tax purposes. (F) Such application shall contain a fully completed statement on
department of taxation form 92, a copy of which form shall be supplied to each
county auditor by the department of taxation. A contract between a county
auditor and a professional appraisal firm shall include, but is not limited to,
the following provisions: (1) Date actual appraisal work is to begin. (2) Date of completion of all appraisals provided for in the
contract and submitting of all reports concerning same to the county auditor,
and the specific tax year for which the appraised values shall be placed on the
tax list and duplicate. The dates provided in paragraphs (F)(1) and (F)(2) of
this rule shall conform to the dates previously fixed by the entry and order of
the tax commissioner issued pursuant to rule 5703-25-07 of the Administrative
Code and in accordance with section 5715.34 of the Revised Code. (3) Provision that the contract shall not be effective until it
is approved by the tax commissioner. (4) Provision for the support of values and a retention of a part
of the consideration of the contract by the county auditor as a guarantee of
the support of values until all complaints have been resolved either by the
board of revision or higher authority in an amount deemed to be satisfactory to
the county auditor of not less than two per cent of the total consideration of
the contract entered into. The support of values before the board of revision
shall be by a responsible and competent employee of the appraisal firm. The
support of values, upon appeals from the board of revision to the board of tax
appeals or to a common pleas court shall be by a competent witness who can
qualify as an expert and who has personally inspected the real property in
litigation and has made his independent written appraisal thereof. The following language shall be included in the
support of value clause of all appraisal contracts: "Within ten days after the filing of a notice
of appeal from a decision of the county board of revision in any valuation
complaint the company or individual appraiser shall be notified by the county
auditor that such notice has been filed and the company shall see that a
competent witness is well prepared to give proper evidence and testimony at
such time as the appeal is heard by either the board of tax appeals or the
court of common pleas and the witness must be one who can qualify as an expert
and who has personally inspected the property in litigation and has made an
independent written appraisal thereof." (5) Provision that the services to be rendered under the
contract, with the exception of the provision regarding the support of values,
are to be completed in time to use the values of the real property in
connection with the tax list and duplicate for the collection of taxes for the
year in which the work is completed and that ten per cent of the contract price
be retained by the county auditor. Upon completion of required services, other
than support of values, and delivery of required reports said retainage shall
be paid by the auditor to the appraisal firm less the retainage provided for
the guarantee of support of values in paragraph (F)(4) of this rule. In the
event all such services covered by the contract, except the support of values,
are not completed upon the date of completion date agreed to, the contract
shall provide that all payments thereafter are to be suspended at the time and
withheld by the county auditor until there has been full compliance with the
terms of the contract of the appraisal firm. Provisions shall be made in the
contract for a penalty of not less than two hundred dollars per day as
liquidated damages to begin on the day following the date of completion as
agreed to in the contract and to apply for each and every day thereafter,
excepting Saturdays, Sundays and legal holidays, up to and including the date
of full and complete compliance by the appraisal firm of the terms of the
contract. In the event that it is necessary for the county auditor to suspend
all payments under the contract for the failure of the appraisal firm to
complete all the services set forth in the contract on the date of completion
agreed to therein, no further payments shall be made to the appraisal firm
under the contract without the approval of the county prosecuting attorney and
the approval of the department of taxation being first obtained. The contract shall also provide that in the
event the appraisal firm for any reason is unable to start the appraisal on the
date set in the contract, then the firm shall immediately notify the tax
commissioner and shall appear before the tax commissioner to explain, under
oath, the reason or reasons it is unable to start the appraisal. (6) The contract shall specifically provide that in the event
that the appraisal firm maintains that the appraisal could not be completed
within the time set in the contract because of an act of God or because of
elements not within the control of the firm such as riots, war, organized work
stoppage, or other delay not caused by the appraisal firm, then the tax
commissioner shall hear the matter and if, in the tax commissioner's opinion,
which shall be final, the delay was actually caused by any of the above stated
reasons or for any other good reason over which the appraisal firm had no
control, then the penalty herein provided for in the contract shall be
dispensed with. (7) As an alternate to the retainage for the guarantee of the
support of values, required by paragraph (F)(4) of this rule and the ten per
cent retainage and the minimum two hundred dollars a day penalty required by
paragraph (F)(5) of this rule a performance bond for the full amount of the
contract satisfactory to the county auditor, approved by the county prosecuting
attorney and the tax commissioner will be accepted. The performance bond must
provide for the completion of the contract including the guarantee of the
support of values. A copy of the performance bond must be filed with the tax
commissioner at the time of filing the appraisal contract. (8) Provision that the employees of the appraisal firm meet the
approval of the county auditor and that such employees shall be appointed
deputies of the county auditor for the purpose of the reappraisal as well as
acting as agents for the appraisal firm. (9) Provision that clearly recites that there is to be no
departure from the terms of the contract or no change or alterations of the
same without the written approval of the tax commissioner being first
obtained. (10) Provision that progress of work reports shall be made during
the course of the appraisal referred to in the contract as determined and
requested by the tax commissioner on D.T.E. form 108. (11) Provision that there is to be no subcontracting of all or any
part of the services provided under the contract without the written consent of
the county auditor and tax commissioner obtained prior to execution of the
subcontract. (G) A general sexennial reappraisal or revaluation of real
property for tax purposes shall include all of the real property situated in
the county and all types and classes of such real property shall be accounted
for in a contract contained in the application on form 92 or in a detailed plan
filed by the auditor pursuant to this rule as set forth above. No such
application and no such sexennial reappraisal or revaluation of real property
shall be approved by the tax commissioner unless all types and classes of real
property (land, buildings, structure improvements and fixtures) are to be, or
are, appraised, reappraised or revalued and placed on the tax list and
duplicate for the same tax year. (H) Each employee engaged in field work, including the employees
furnished by an appraisal firm, shall be provided with a proper identification
card by the county auditor. (I) Paragraphs (A) to (H) of this rule are not to be construed as
a prohibition or limitation upon the authority of the county auditor to include
in a contract with an appraisal firm any additional provisions which, in the
judgment of the auditor, will insure that the appraisal be performed and
completed in the best possible manner, provided however, that such additional
provisions shall be in writing and shall be included as a clause in the written
contract. (J) Professional appraisal firms or individual professional
appraisers, prior to contracting with a county auditor to make a complete or
partial appraisal either for a general reappraisal or for annual maintenance
for real property tax purposes as provided by these rules, shall have submitted
to the tax commissioner the following documents: (1) A list of officers and management with their qualifications
as of the fiscal year preceding the thirty-first of December of the year in
which submitted; or if a newly formed corporation or partnership, a list of
present officers and management with their qualifications. (2) A list of all regional or project appraisal supervisors, or
equivalent, that operate in Ohio. (3) A list of taxing authorities with addresses for which the
firm or individual professional appraiser has completed a general reappraisal
of real property in the last ten years or the appraisal is currently in
progress. (4) A list of references from financial
institutions. (5) After the initial submission of such lists the firm or
individual appraiser shall file such documents by the thirty-first of December
of each year. (K) After receiving the documents submitted by the appraisal
firms and individual appraisers, the tax commissioner shall create a file of
the same. The tax commissioner shall review the documents and may require an
informal discussion with the representatives of each firm or individual
appraiser who has filed such documents. After this review is complete, the tax
commissioner shall issue an entry in the month of February of each year,
listing all appraisal firms and individual appraisers that have created a
proper file for that year. This file will be used by the tax commissioner when
considering the approval or disapproval of a county auditor's application
requesting authority to employ an appraisal firm or individual appraiser. This
file will also be available to the county auditors for their use when selecting
an appraisal firm or an individual appraiser. (L) Nothing set out in this chapter shall be construed as a
prohibition on the county auditor with respect to the auditor's duty to revalue
and assess at any time all or any part of the real property in the county where
the auditor finds that the same has changed in value or is not on the tax list
at its taxable value as provided by section 5713.01 of the Revised
Code. (M) For purposes of seeking approval of assessment
contracts by filing the form 92 with the tax commissioner, the county auditor
should seek approval only for appraisal-related contracts, which include
contracts for the following appraisal purposes: general reappraisal, triennial
update, annual maintenance and new construction, consulting, current
agricultural use valuation compliance, exempt study, land-based and aerial
photography used directly for appraisal purposes, sales review, split-parcel
appraisal, support of valuation, soil study, manufactured home appraisal, and
any other appraisal services. The tax commissioner hereby grants approval to
the county auditors, without having to file the form 92, to enter into
assessment-related contracts that are not for appraisal services, which include
contracts for the following purposes: mapping, aerial photography used in
mapping, computers (hardware, software, and maintenance), Internet, technical
support, copiers, fiber optics, microfilm, bond or debt service contracts, and
any other assessment-related contracts that are not for appraisal services. The
tax commissioner may order any particular county auditor to seek, in writing,
prior approval from the tax commissioner to enter into assessment-related
contracts that are not for appraisal services, as the tax commissioner deems
necessary, in the manner and for the time period the tax commissioner
prescribes.
Last updated July 1, 2021 at 11:26 AM
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Rule 5703-25-09 | Adoption and use of property records.
Effective:
October 9, 2014
Each county auditor shall adopt a system of currently maintained property records for each lot, tract or parcel of real property in the county of the auditor's jurisdiction as provided in section 5713.03 of the Revised Code. Such property records shall be in either sheet, card, or electronic form as determined by the county auditor. The information contained on this record, in conjunction with the actual viewing of the property by the appraiser and other pertinent information available, shall be used in estimating the true value in money of each parcel of real property in the county. Each such record shall provide, insofar as applicable and/or practical, the following information: (A) General: (1) Name of the taxing district. (2) Name and address of the owner of record. (3) Legal description. (4) Address and location of the property. (5) Number of acres. (6) Lot or tract frontage and depth.. (B) Residential, industrial and commercial land factors: (1) Type of road or street. (2) Utilities - gas, electric, water, sewer, septic tank. (3) Sidewalk. (4) Topography (5) Shape of lot or tract. (6) Type of neighborhood. (7) Neighborhood trend - improving, static, declining, blighted. (8) Industrial and commercial land shall be classified according to present or probable use as plant or building site, parking area, storage area, waste or dump area, etc. Appropriate unit values (acre, square foot, or front foot) shall be established for each type of use and the computation of value shown for each type of land, insofar as applicable. (9) The computation of land value shall include the following, insofar as applicable: (a) Frontage of lot or tract. (b) Depth of lot or tract. (c) Area. (d) Street or other unit price. (e) Depth factor. (f) Corrective factors - corner influence, alley influence, etc. (C) Agricultural land factors (1) Soil type. (2) Topography (3) Erosion. (4) Drainage. (5) Land use (number of acres) classified as follows: (a) Homesite. (b) Tillable land. (c) Orchard. (d) Permanent pasture. (e) Woodland. (f) Waste. (6) The computation of agricultural land value shall include the following insofar as applicable. (a) Price per acre for each grade and use of land. (b) Total land value for each tract of land different grade and use. (c) Total land value for entire parcel. (D) Building details and construction features (1) Coding as provided in rule 5703-25-10 of the Administrative Code. (2) Type of construction. (3) Dimensions. (4) Grade. (5) Age - actual or estimated. (6) Condition. (7) Foundation. (8) Basement area - full; 3/4; 1/2; 1/4. (9) Story heights. (10) Exterior walls. (11) Roofing. (12) Floors. (13) Interior finishing. (14) Attic finish. (15) Air conditioning (heating or cooling type). (16) Plumbing. (17) Tiling. (18) Lighting. (19) Number of rooms. (20) Porches and additions. (21) Fireplace. (22) Built-in equipment - disposals, dishwashers, incinerators, etc. (23) Alterations - betterments - improvements (date). (24) Reproduction or replacement cost in dollars (units and price per unit) based on costs for similar buildings, structures, fixtures or improvements to land as provided in rule 5703-25-12 of the Administrative Code. (25) Depreciation - type and rate used in per cent and amount of dollars. (26) Obsolescence - type and rate used in per cent and amount of dollars. (27) Space for computing building values. (28) Space for sketch of buildings (property record cards used in appraising agricultural lands and buildings shall have sufficient space for describing and computing value of all farm buildings, including the dwelling) (29) Each property record card, sheet, or form required to be prepared by this rule shall contain space for and shall have set out thereon the following information: (a) The "true value in money" of the land, improvements to the land, and the total value of the parcel as appraised. (b) The "true value in money" of the land, improvements to the land, and the total value of the parcel as adjusted each year by the county auditor in compliance with rule 5703-25-06 of the Administrative Code. (c) The "taxable value" of the land, improvements to the land, and the total value of the parcel as calculated each year. In counties using computers taxable values may be shown on a data processing printout rather than on the property record card. The parcels should be listed in the same order as the tax list along with the following information: The parcel number of each property, the owner's name, the class of property, the previous year's true value, the new true value, and the new thirty-five per cent or tax value of land and improvements of each parcel of real property as well as the factor applied. (E) Description of commercial and industrial property. Each county auditor, insofar as applicable and/or practical, shall describe in detail on the record card, sheet, or form, and shall itemize, the precise commercial and industrial property that the auditor is valuing as "real property" as distinguished from "personal property." (F) Additional information The county auditor shall set forth on the property or appraisal record this additional data, insofar as applicable and/or practical. (1) The date of any sale or transfer of the parcel involved since its prior appraisal. (2) The sales price thereof from the statement of value required by division (A) of section 319.202 of the Revised Code. (3) The annual rental income, both gross and net, earned or capable of being earned by commercial or investment type property. (4) If, for any reason, any necessary information is not obtainable, or the property owner neglects or refuses to divulge such information, the facts and reasons therefor shall be noted on the appraisal card or sheet. (5) The dates on which the parcel was measured, listed and reviewed with identification of the appraiser by name, initials or number. The county auditor is authorized to use any additional information for property or appraisal records when the auditor deems it necessary. In the event the auditor uses other approaches of estimating true value than the cost approach, the auditor's reasonings and calculations should show on the appraisal record (G) Provision shall be made for the coding of appraisal cards, sheets, or forms according to the use or coding of property as provided in rule 5703-25-10 of the Administrative Code.
Last updated November 15, 2023 at 2:14 PM
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Rule 5703-25-10 | Classification of real property and coding of records.
Effective:
October 3, 2016
(A) As required by section 5713.041 of the Revised Code, the county auditor shall classify each parcel of taxable real property in the county into one of the two following classifications, which are: (1) Residential and agricultural land and improvements; (2) All other taxable land and improvements, including commercial, industrial, mineral and public utility land and improvements. (B) Each separate parcel of real property with improvements shall be classified according to its principal and current use, and each vacant parcel of land shall be classified in accordance with its location and its highest and best probable legal use. In the case where a single parcel has multiple uses the principal use shall be the use to which the greatest percentage of the value of the parcel is devoted. The following definitions shall be used by the county auditor to determine the proper classification of each such parcel of real property: (1) "Agricultural land and improvements" - The land and improvements to land used for agricultural purposes, including, but not limited to, general crop farming, dairying, animal and poultry husbandry, market and vegetable gardening, floriculture, nurseries, fruit and nut orchards, vineyards and forestry. (2) "Mineral land and improvement" - Land, and the buildings and improvements thereon, used for mining coal and other minerals as well as the production of oil and gas including the rights to mine and produce such minerals whether separated from the fee or not. (3) "Industrial land and improvements" - The land and improvements to land used for manufacturing, processing, or refining foods and materials, and warehouses used in connection therewith. (4) "Commercial land and improvements" - The land and improvements to land which are owned or occupied for general commercial and income producing purposes and where production of income is a factor to be considered in arriving at true value, including, but not limited to, apartment houses, hotels, motels, theaters, office buildings, warehouses, retail and wholesale stores, bank buildings, commercial garages, commercial parking lots, and shopping centers. (5) "Residential land and improvements" - The land and improvements to the land used and occupied by one, two, or three families. (C) Each property record of taxable real property shall be coded in accordance with the code groups provided for in this paragraph. Each property record of exempt property shall also be coded in accordance with the code groups for exempt property. The county auditor shall annually furnish to the tax commissioner an abstract of taxable values in which is set out in separate columns the aggregate taxable values of land and improvements in each taxing district for each of the major code groups provided for in this paragraph, and an abstract of exempt values in which is set out in separate columns the aggregate exempt values of land and improvements in each taxing district for each of the major exempt code groups provided for in this paragraph. | Major Use and Codes | | | Code No. Group | Use | | | | 100 to 199 Incl. | Taxable agricultural real property | | 200 to 299 Incl. | Taxable mineral lands and rights | | 300 to 399 Incl. | Taxable industrial real property | | 400 to 499 Incl. | Taxable commercial real property | | 500 to 599 Incl. | Taxable residential real property | | 600 to 699 Incl. | Exempt real property | | 700 to 799 Incl. | Special tax abatements for improvements | | 800 to 899 | Public Utilities |
The first digit identifies the major use and the last two digits the sub-use or group. Parcels, other than exempt property, that are vacant (no structures or improvements present) shall be coded 100, 200, 300, 400 or 500 depending on the respective class unless part of an existing unit. Certain numbers are left blank to provide for future expansion. | Use | | | 100 | Agricultural vacant land | | 101 | Cash - grain or general farm | | 102 | Livestock farms other than dairy and poultry | | 103 | Dairy farms | | 104 | Poultry farms | | 105 | Fruit and nut farms | | 106 | Vegetable farms | | 107 | Tobacco farms | | 108 | Nurseries | | 109 | Green houses, vegetables and floraculture | | 110 | Agricultural vacant land "qualified for current agricultural use value" | | 111 | Cash - grain or general farm "qualified for current agricultural use value" | | 112 | Livestock farms other than dairy and poultry "qualified for current agricultural use value" | | 113 | Dairy farms "qualified for current agricultural use value" | | 114 | Poultry farms "qualified for current agricultural use value" | | 115 | Fruit and nut farms "qualified for current agricultural use value" | | 116 | Vegetable farms "qualified for current agricultural use value" | | 117 | Tobacco farms "qualified for current agricultural use value" | | 120 | Timber or forest lands not qualified for the Current Agricultural Use Value program pursuant to section 5713.31 of the Revised Code or the Forest Land Tax program pursuant to section 5713.23 of the Revised Code | | 121 | Timber land taxed at its "current agricultural use value" as land used for the growth of noncommercial timber pursuant to section 5713.30(A)(1) of the Revised Code | | 122 | Timber land taxed at its "current agricultural use value" as land used for the commercial growth of timber | | 123 | Forest land qualified for and taxed under the Forest Land Tax program in compliance with the program requirements in place prior to November 7, 1994 | | 124 | Forest land qualified for and taxed under the Forest Land Tax program in compliance with the program requirements in place on or after November 7, 1994 | | 190 | Other agricultural use | | 199 | Other agricultural use "qualified for current use value" | | 210 | Coal lands - surface and rights | | 220 | Coal rights - working interest | | 230 | Coal rights - separate royalty interest | | 240 | Oil and gas rights - working interest | | 250 | Oil and gas rights - separate royalty interest | | 260 | Other minerals | | 300 | Industrial - vacant land | | 310 | Food and drink processing plants and storage | | 320 | Foundries and heavy manufacturing plants | | 330 | Manufacturing and assembly, medium | | 340 | Manufacturing and assembly, light | | 350 | Industrial warehouses | | 360 | Industrial truck terminals | | 370 | Small shops (machine, tool & die, etc.) | | 380 | Mines and quarries | | 390 | Grain elevators | | 399 | Other industrial structures | | 400 | Commercial - vacant land | | 401 | Apartments - 4 to 19 rental units | | 402 | Apartments - 20 to 39 rental units | | 403 | Apartments - 40 or more rental units | | 410 | Motels and tourist cabins | | 411 | Hotels | | 412 | Nursing homes and private hospitals | | 415 | Trailer or mobile home park | | 416 | Commercial camp grounds | | 419 | Other commercial housing | | 420 | Small (under 10,000 sq. ft.) detached retail stores | | 421 | Supermarkets | | 422 | Discount stores and junior department stores | | 424 | Full line department stores | | 425 | Neighborhood shopping center | | 426 | Community shopping center | | 427 | Regional shopping center | | 429 | Other retail structures | | 430 | Restaurant, cafeteria and/or bar | | 435 | Drive-in restaurant or food service facility | | 439 | Other food service structures | | 440 | Dry cleaning plants and laundries | | 441 | Funeral homes | | 442 | Medical clinics and offices | | 444 | Full service banks | | 445 | Savings and loans | | 447 | Office buildings - 1 and 2 stories | | 448 | Office buildings - 3 or more stories - walk up | | 449 | Office buildings - 3 or more stories - elevator | | 450 | Condominium office units | | 452 | Automotive service station | | 453 | Car washes | | 454 | Automobile car sales and services | | 455 | Commercial garages | | 456 | Parking garage, structures and lots | | 460 | Theaters | | 461 | Drive-in theaters | | 462 | Golf driving ranges and miniature golf courses | | 463 | Golf courses | | 464 | Bowling alleys | | 465 | Lodge halls and amusement parks | | 480 | Commercial warehouses | | 482 | Commercial truck terminals | | 490 | Marine service facilities | | 496 | Marina (small boat) | | 499 | Other commercial structures | | 500 | Residential vacant land | | 510 | Single family dwelling | | 520 | Two family dwelling | | 530 | Three family dwelling | | 550 | Condominium residential unit | | 560 | House trailers or mobile homes affixed to real estate | | 599 | Other residential structures |
In the residential coding the third or last digit indicates the size of tract used for residential property. | 0 | Platted Lot | | | 1 | Unplatted | -0 to 9.99 acres | | 2 | " | 10 to 19.99 acres | | 3 | " | 20 to 29.99 acres | | 4 | " | 30 to 39.99 acres | | 5 | " | 40 or more acres |
| 600 | Exempt property owned by United States of America | | 610 | Exempt property owned by state of Ohio | | 620 | Exempt property owned by counties | | 630 | Exempt property owned by townships | | 640 | Exempt property owned by municipalities | | 645 | Exempt property owned or acquired by metropolitan housing authorities | | 650 | Exempt property owned by board of education | | 660 | Exempt property owned by park districts (public) | | 670 | Exempt property owned by colleges, academies (private) | | 680 | Charitable exemptions - hospitals - homes for aged, etc. | | 685 | Churches, etc., public worship | | 690 | Graveyards, monuments, and cemeteries | | 700 | Community urban redevelopment corporation tax abatements (R.C. 1728.10) | | 710 | Community reinvestment area tax abatements | | 720 | Municipal improvement tax abatements (R.C. 5709.41) | | 730 | Municipal urban redevelopment tax abatements (R.C. 725.02) | | 740 | Other tax abatements (R.C. 165.01 and 303.52) | | 800 | Agricultural land and improvements owned by a public utility other than a railroad | | 810 | Mineral land and improvements owned by a public utility other than a railroad | | 820 | Industrial land and improvements owned by a public utility other than a railroad | | 830 | Commercial land and improvements (including all residential property) owned by a public utility other than a railroad | | 840 | Railroad real property used in operations | | 850 | Railroad real property not used in operations | | 860 | Railroad personal property used in operations | | 870 | Railroad personal property not used in operations | | 880 | Public Utility personal property other than rail-roads |
(D) The coding system provided in this rule shall be effective for tax year 1985. (E) Nothing contained in this rule however, shall cause the valuation of any parcel of real property to be other than its true value in money or be construed as an authorization for any parcel of real property in any class in any county to be valued for tax purposes at any other value than its "taxable value" as set out in rule 5703-25-05 of the Administrative Code.
Last updated November 15, 2023 at 2:14 PM
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Rule 5703-25-11 | Valuation of land.
Effective:
October 3, 2016
(A) General - All land shall be appraised at its true value
in money as of tax lien date of the year in which the appraisal or update of
values is made. In arriving at the true value in money the county auditor shall
consider, along with other factors, not only the present use of the land but
also its highest and best probable legal use consistent with existing zoning
and building regulations. The requirement that land be classified under rule
5703-25-10 of the Administrative Code according to its principal use shall not
affect the requirement of this rule that it be appraised at its highest and
best probable legal use. The present improvements to the land, the demand and
supply of land, the demand and supply of land for such use, financing method,
the length of time until developed and the cost of development are factors that
should be considered in determining the highest and best probable legal use of
the land. (B) All relevant facts tending to influence the market
value of land should be considered, including, but not limited to, size, shape,
topography, soil and subsoil, drainage, utility connections, street or road,
land pattern, neighborhood type and trend, amenities, zoning, restrictions,
easements, hazards, etc. (C) Land may be valued by four principal
methods: (1) The preferred method is the market data or comparative
process requiring the collection and analysis of actual arms-length sales and
other market information on comparable sites made within a reasonable time of
the date of the appraisal with adjustments for variations. This method should
be used except in unusual circumstances. (2) The allocation method in which the land value is
estimated by subtracting the value of the improvements from a known sale price.
This is primarily used in an area where there are very few sales of vacant land
and the improvements to land are of a generally uniform type. (3) The land residual method estimates land value by
capitalizing the residual income imputable to land as derived from actual or
hypothetical new improvements assuming highest and best use. This method is
useful in arriving at land value when there are few or no sales or as a check
against the market approach. (4) The development method can be used in valuing land
ready for development by estimating value as fully developed and subtracting
the development, administrative and entrepreneurial costs. (D) The county auditor shall deduct from the value of each
separate parcel of real property the amount of land occupied and used by a
canal or used as public highway as provided in section 5713.04 of the Revised
Code. (E) Agricultural - Agricultural lands shall be classified
and valued according to their characteristics and capabilities for use, based
primarily on what they will produce under average conditions and typical
management in the locality. Assessors should obtain and use information
available relating to soil classification, land capabilities, land use and soil
maps, production records, price records and other information from the Ohio
state university, Ohio agricultural research and development center, county
A.S.C., soil conservation service, soil and water conservation districts and
other sources. All agricultural lands shall first be valued according to their
true value. Then if the owner applies to have the land valued according to its
current value the land has for agricultural use the land may be valued
according to rules 5703-25-30 to 5703-25-36 of the Administrative
Code (F) Industrial - Additional factors that shall be
considered in valuing industrial land are the convenience of location to
shipping and labor sources as well as the proximity to related industries. Land
not used in manufacturing shall be valued according to its value for use as
parking lots, storage, waste or dump area, or other uses both present and
probable. (G) Commercial - In the valuation of commercial sites the
location in the trading area, the purchasing power of the entire area, and the
relative availability of sites shall be considered in addition to previously
mentioned factors. (H) Residential - Residential sites located in suburban and
rural areas shall be valued by using the same factors that are used in valuing
urban residential lands with the same facilities and amenities. (I) Coal, mineral deposits, oil and gas - Coal and minerals
shall be valued in the same manner and on the same price level as other real
property. Some of the factors that shall be considered in valuing coal and
mineral deposits are the quality and extent of the deposit, the active working
area which at current production will be mined within five years, active
reserves that will not be worked for five to ten years, inactive reserves that
will not be worked until after ten years, and mined out or depleted
areas. Separate oil and gas rights shall be valued in accordance with the
annual entry of the tax commissioner in the matter of adopting a uniform
formula in regard to the valuation of oil and gas deposits in the eighty-eight
counties of the state. When rights to coal, minerals, oil and gas have not been separated
from the fee, the value of the mineral deposits shall be added to the value of
the surface. (J) Pricing units and preparation of land unit price
schedules, and depth tables. Land unit prices (price per acre, square foot or
front foot) used shall be those appropriate and typically used in the market in
pricing similar land. Generally per acre prices shall be used in pricing
agricultural lands. Large industrial, commercial or residential tracts may be
priced by the use of per acre or square foot prices. Front foot prices shall be
used, generally, for the pricing of residential and commercial lots and lands
in congested areas. Regardless of the pricing unit used, the result shall be
the true value in money of the land. (K) Each county auditor shall prepare, or have prepared,
under the auditor's direction and supervision: (1) Land schedules, setting forth land unit prices to be
used in appraising the different classes of land. (2) Tables, where applicable, showing depth, corner and
alley influence factors, etc., to be used in conjunction with the unit
prices. (3) Tax maps that shall accurately indicate the area,
acreage or dimensions of each lot, tract, or parcel of land in the county,
together with the name of the owner, if possible, and the lot section, or
survey number, showing the unit price used in pricing the various types of
land. One set of all land unit price schedules, depth, corner and alley
influence tables, and tax maps with unit prices shall be kept on file in the
county auditor's office, open for public inspection during regular office
hours.
Last updated November 15, 2023 at 2:15 PM
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Rule 5703-25-12 | Valuation of buildings, structures, fixtures and improvements to land.
Effective:
October 20, 2023
(A) General - The true value of
improvements may be determined by either the market data, income or cost
approach. Regardless of the approach used the total of the depreciated value of
the improvements to land and the "true value" of the land should be
the "true value" of the property as a whole, as defined in rule
5703-25-05 of the Administrative Code. While the cost approach will generally
be used one of the other approaches should be used as a check on whether the
determination of depreciation or obsolescence is correct. In arriving at the value of the depreciated
improvements by the market data approach the value of the entire property is
estimated by the use of comparable sales after allowing for variations. The
land value determined according to rule 5703-25-11 of the Administrative Code
is then subtracted to arrive at the value of the improvements in their present
or depreciated condition. The building residual technique is used to
estimate improvement values by the income approach. After land value is arrived
at the value of the improvements is estimated by capitalizing the net income
remaining after deduction for all expenses including interest on the land
value. In the use of the cost approach to estimate
improvement value the replacement cost new is first estimated. From the cost
new deductions are made for depreciation including physical deterioration,
functional and economic obsolescence to arrive at the value of the improvements
in their present condition. (B) When a general sexennial reappraisal
is being made by the county auditor under the provisions of section 5713.01 of
the Revised Code, all prices used in determining the replacement cost of
buildings, structures, fixtures and improvements to land will be prices
prevailing during the year immediately preceding the tax lien date of the year
the reappraisal is to be effective for tax purposes. The county auditor is directed and ordered to
prepare, or have prepared under the auditor's supervision, schedules of
all building costs that will be used in appraising buildings, structures,
fixtures and improvements to land in the county. The auditor will prepare
separate schedules for residential, commercial, industrial and farm buildings.
Building cost schedules will be based on the prices of labor, materials,
architects' or engineers' fees, plus contractors' overhead and
profit, and other charges for the class, type or grade of building in the area
to be appraised prevailing during the period specified by the preceding
paragraph Residential building cost schedules will include
at least six grades of construction. Each grade will be identified by number or
letter. Additional grading may be obtained by adding or deducting a percentage
for each grade by using a plus or minus sign, followed by the per cent
used. Farm building cost schedules will include all
farm buildings (exclusive of the farm dwelling which will be priced according
to the residential schedule) including general and special type barns, milk
houses, machinery sheds, granaries, corn cribs, silos, hog houses, and other
miscellaneous farm buildings. The various schedules are to be used in
estimating the replacement cost of each building, fixture or improvement to
land thereto. In the third calendar year following the sexennial reappraisal
each value will be updated, either by percentage or otherwise so that it
accurately reflects current market value in the county as of January of the
current tax year. The selection of the method of updating values will depend on
the manner in which the triennial update or equalization of true and taxable
values required by rule 5703-25-06 of the Administrative Code is performed. The
method selected should be one that will insure that the taxable values of new
buildings, etc. will equal thirty-five per cent of the current true value in
the same uniform manner as all other real property. One set of all building schedules of every class,
type and grade will be kept on file in the county auditor's office and
open for public inspection during the regular office hours (C) Building inspection - Each building
will be measured to determine the number of square or cubic feet it contains,
and a sketch will be drawn on the property record card. Major buildings such as
dwellings and barns will be sketched on the property record card with other
minor buildings to be numbered, the number encircled to appear in the space for
the sketch of buildings in its proper relation to the dwelling and barn,
etc. The exterior, and if possible, the interior of
each building will be inspected with notations being made on the record card of
construction features, physical conditions, and other factors that would affect
value. Each building will be graded according to quality of
construction. Each county auditor will describe in detail on
the record card or sheet, and will itemize, the precise industrial and
commercial property that the auditor is valuing as "real property" as
distinguished from "personal property." In questions of the
classification of property as real or personal the county auditor will be
guided by rule 5703-3-01 of the Administrative Code. (D) Estimation of depreciation and
obsolescence - When the cost approach is used in appraising the buildings an
estimate will be made of depreciation including all types of obsolescence that
are to be deducted from replacement cost new of the improvements so that the
total value of depreciated improvements and the land will be equal to the true
value of the entire property as defined in rule 5703-25-05 of the
Administrative Code. (1) In arriving at the
true value, among other factors, the utility of the improvements to the land
will be considered. In the appraisal of commercial or investment type property
the county auditor is directed to consider the terms of all outstanding leases
and the amount, quality, and durability of income that the property would
produce under normal management and the actual amounts being currently returned
on similar investments, and to reflect these factors in the final determination
of true value in money in any uniform logical way that the auditor may see
fit. (2) Depreciation and
obsolescence will depend upon the following three factors: (a) Physical depreciation is a loss in value resulting from
physical deterioration due to age, wear and tear, disintegration, and the
action of the elements. The amount deducted for physical depreciation will
reflect loss in value due to general deterioration and the need for
rehabilitation. (b) Functional obsolescence is a loss in value resulting from
poor planning, overcapacity or undercapacity, due to age, size, style,
technological improvements or other causes within the property. There are two
types of functional obsolescence: (i) Curable functional
obsolescence which may be estimated at the amount it would cost to modernize
the improvements. (ii) Incurable functional
obsolescence which may be estimated by considering the amount it would cost to
replace the improvements with a modern structure suitable for the same purpose,
or by the capitalization of the loss of income due to the degree of in-utility
or extraordinary operating costs related to the structure. (c) Economic obsolescence is a loss due to external economic
forces, such as changes in the use of land, location, zoning or legislative
enactments that might restrict or change property rights and values and other
similar factors. (3) In arriving at the
rate of depreciation and obsolescence to be applied to buildings, structures,
fixtures, and improvements to land, the auditor will consider, among other
things, the following: (a) The rental income and sale prices in the current market for
properties of similar type and condition. (b) Type of construction. (c) Type and extent of replacements, restorations, or
modernizations (d) Type and extent of replacements, restorations, or
modernizations. (e) Age. (f) Actual use compared to use for which
constructed. (g) Location. (h) Rapidly changing technological improvements in construction
methods. (i) Rapidly changing technological changes in manufacturing
processes. (j) Changes in consumer demand and other external economic
forces. (k) Any other recognized factor which may have a particular
applicability in a given case.
Last updated October 20, 2023 at 1:51 AM
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Rule 5703-25-13 | Review of appraisal.
Effective:
October 20, 2023
(A) Following the initial inspection and
extension of true values on the property record card, and prior to submitting
the returns to the county board of revision as required by section 5715.16 of
the Revised Code, each parcel of real property will be reviewed by competent
appraisers. The purpose of this review is to insure that each property has been
valued uniformly in relation to other properties at true value as defined in
rule 5703-25-05 of the Administrative Code, so that when the values of land and
improvements are added together, the resulting value indicates the true value
in money of the entire property. (B) In making this review all factors
affecting value will be considered including: (1) Mathematical
accuracy. (2) Land classification
and pricing (3) Listing
accuracy: (a) Building measurements (b) Construction features (c) Construction quality grade (d) Use of proper price schedule. (4) Proper application of
depreciation and obsolescence. (5) Sales of comparable
property for like use. (C) If the reviewer finds that a property
or properties have not been valued at true value, the reviewer will make the
corrections needed to obtain the correct values and will place said corrected
values on the property record. (D) As part of the appraisal review the
county auditor will prepare or have prepared an analysis of recent real estate
transactions comparing the appraisal value to the prices paid for real property
to determine whether all real property in the different subdivisions,
neighborhoods and classes have been appraised uniformly at true
value.
Last updated October 20, 2023 at 1:51 AM
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Rule 5703-25-14 | Documents to be filed in the county auditor's office.
Effective:
October 3, 2016
The following shall be on file in the county
auditor's office and open for public inspection during regular office hours
after completion of the reappraisal: (A) One set of all tax maps showing land unit
prices. (B) One set of depth and other land price
schedules. (C) One set of all building schedules of every class, type
and grade. (D) Property record card or sheet for each parcel of real
property. (E) In the event other approaches such as computer assisted
appraisals, are used, as provided in rule 5703-25-07 of the Administrative Code
documents describing the method and application.
Last updated November 15, 2023 at 2:15 PM
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Rule 5703-25-16 | Procedure after reappraisal or update.
Effective:
October 20, 2023
(A) Procedure after sexennial
reappraisal: (1) After the appraisal
is completed the county auditor will total the "true value in money"
of land, building and total of agricultural, industrial, commercial and
residential property in each taxing district, and will prepare and file an
abstract of these true values with the department of taxation, which abstract
is to be considered as a tentative abstract of appraised values only. Each
tentative abstract should be submitted prior to the second Monday in
June. (2) In order to achieve
uniformity of assessment among the eighty-eight counties, and keeping in mind
that there are variations in cost schedules, depreciation schedules, etc., used
by the various appraisal firms, the staff of the department of taxation, upon
receipt of the "appraised value" abstract as prepared and filed by a
county auditor, will review the appraisal in the light of the information it
has collected relative to recent real property sales and other information
relating to real property values to determine whether all real property has
been uniformly appraised at "true value in money" as defined by rule
5703-25-05 of the Administrative Code. After such review the staff will
recommend to the tax commissioner whether the commissioner should accept the
reported appraisal value as a reasonable estimate of true value as of tax lien
date of the year of reappraisal or reject the values and order the auditor to
make the changes needed to insure that the appraisal values are a reasonable
estimate of true value in money as of tax lien date of the year of reappraisal.
The county auditor will be informed of the staff's
recommendation. (3) The commissioner will
then transmit to the auditor a tentative order, which is not a final order of
the commissioner, which will contain the recommendations of the commissioner as
to any changes in aggregate values, or in any class thereof, in the county or
any taxing district thereof. After a review of such tentative order the auditor
will submit to the commissioner, on or before the first Monday of August, a
final abstract of taxable values and a final abstract of the current
year's true value of land valued under section 5713.31 of the Revised
Code, as both are required under section 5715.23 of the Revised Code. The
commissioner will review the final abstracts and make the determinations
required by section 5715.24 of the Revised Code and issue a final order, if
necessary, under section 5715.25 of the Revised Code. (4) Unless such an order
is appealed, as provided in section 5715.251 of the Revised Code, the county
auditor will then determine the "taxable value" of each and every
parcel of real property by multiplying the true value of each and every parcel
in each and every class of real property in the county by thirty-five per cent
as prescribed by rule 5703-25-06 of the Administrative Code. (B) Procedure after update: (1) The county auditor of
a county in the third calendar year following a general reappraisal will
analyze local real estate sales that have occurred in the last three preceding
calendar years together with other related information pertaining to real
property values in the county. These studies should be designed to enable the
auditor to increase or decrease the taxable valuation of parcels in accordance
with actual changes in valuation of real property which occur in different
subdivisions, neighborhoods, or among classes of real property in the
county. (2) As early as possible
in the third calendar year following a sexennial reappraisal the department of
taxation will notify the county auditor of its preliminary estimate of changes
in real property tax values needed for that tax year. This estimate will be
based on an analysis of real property sales that occurred in the county during
the preceding three calendar years and other studies of real property values.
These estimates should be compared to information available locally including
the auditor's own studies of the local real estate market and other
related factors. (3) After consideration
of available information the county auditor will proceed to comply with
paragraphs (C) to (F) of rule 5703-25-06 of the Administrative Code to increase
or decrease the true and taxable value of each parcel of real property in the
county by an amount which will cause all real property on the tax list and
duplicate to be valued as required by law. (C) General: (1) If a county auditor
is not satisfied with the recommendations or preliminary estimates provided by
the staff of the department of taxation under paragraph (A) or (B) of this rule
a conference with the commissioner may be requested. Such application will be
made by the filing of a written application within thirty days after receipt of
the recommendation. The application will specify the reasons for requesting
such a conference. (2) After complying with
paragraph (A) or (B) of this rule the county auditor will then prepare and file
with the department of taxation the statutory abstract of taxable real property
value and the abstract of current agricultural use values required by section
5715.23 of the Revised Code, wherein there is to be set out the "taxable
value" of the real property in the county. (3) The county auditor
will not lay before the county board of revision the returns of the assessment
of real property for the current year in accordance with the provisions of
section 5715.16 of the Revised Code, nor the abstract required to be filed with
the tax commissioner under the provisions of sections 5715.23 and 5715.24 of
the Revised Code, until and unless the property records required by rule
5703-25-09 of the Administrative Code for each and every parcel are in the
auditor's possession and open to the inspection of any interested
person. (4) On the general tax
list and duplicate of real and public utility property compiled and prepared
under the pertinent provisions of section 319.28 of the Revised Code, only the
taxable value of the land, building and total of the real property will be
listed. The taxable value of land qualified to be taxed at its current
agricultural use value, pursuant to section 5713.30 of the Revised Code to be
entered on said tax list and duplicate will be thirty-five per cent of its
current agricultural use value as determined under rules 5703-25-30 to
5703-25-36 of the Administrative Code. The replacement cost figures,
depreciation figures, etc., will be placed on the auditor's property
record as provided in rule 5703-25-09 of the Administrative Code. Changes in
true and taxable values made in the update year in compliance with paragraphs
(C) to (F) of rule 5703-25-06 of the Administrative Code will also be recorded
on the property record. Any changes ordered by the board of revision, board of
tax appeals or tax commissioner in said taxable values will, together with the
date of change, be noted on the tax list and duplicate as provided in section
319.28 of the Revised Code, and the property record as required by rule
5703-25-09 of the Administrative Code.
Last updated October 20, 2023 at 1:51 AM
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Rule 5703-25-18 | Partial exemption from real property tax.
Effective:
September 11, 2017
(A) Real property that is not intended primarily for use in
a business activity shall qualify for a partial exemption from real property
taxation pursuant to section 319.302 of the Revised Code. For purposes of this
partial exemption, "business activity" includes all uses of real property,
except: (1) Farming; (2) Leasing property for farming; (3) Occupying or holding property improved with
single-family, two-family, or three-family dwellings; (4) Leasing property improved with single-family,
two-family, or three-family dwellings; and (5) Holding vacant land that the county auditor determines
will be used for farming or to develop single-family, two-family, or
three-family dwellings. (B) For purposes of this partial exemption, "farming" does
not include land used for the commercial production of timber that is receiving
the tax benefit under section 5713.23 or 5713.31 of the Revised Code and all
improvements connected with such commercial production of timber. (C) In determining whether real property is qualified for
the partial exemption, each separate parcel of real property shall be
classified according to its principal and current use, and each vacant parcel
of land shall be classified in accordance with its location and its highest and
best probable legal use. In the case where a single parcel has multiple uses
the principal use shall be the use to which the greatest percentage of the
value of the parcel is devoted. (D) In determining whether real property is qualified for
the partial exemption, the county auditor shall be guided by the property
record of taxable real property coded in accordance with the code groups
provided for in paragraph (C) of rule 5703-25-10 of the Administrative
Code.
Last updated November 15, 2023 at 2:15 PM
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Rule 5703-25-30 | Definitions.
Effective:
September 11, 2017
As used in rules 5703-25-30 to 5703-25-36 of the
Administrative Code, the following definitions shall apply unless the context
requires otherwise: (A) Statutory definitions: The following terms are as
defined in section 5713.30 of the Revised Code. (1) "Land devoted exclusively to agricultural
use; (2) "Conversion of land devoted exclusively to agricultural
use"; (3) "Tax savings"; (4) "Owner." (B) Nonstatutory definitions: (1) "Cropping and land use pattern" - The typical sequence
or distribution of major field crops and uses with the proportion of each crop
or use expressed as a decimal fraction of the total acreage being
farmed. (2) "Current agricultural use value of land" - The current
agricultural use value of land devoted exclusively to agricultural use of a
parcel is the current market value or fair market value of the land considering
only those factors that affect the parcel's value from an agricultural
standpoint. It is the price at which the property would change hands on the
open market between a willing buyer and seller, neither being under any
compulsion to buy or sell, and both having knowledge of all relevant facts, if
the highest and best use was exclusively agricultural with no other influence
being present. Usually this value will be highly dependent on the soil
productivity of the parcel. (3) "Depreciation or appreciation rate" - The total per
cent of decrease or increase in value that a prudent investor would expect to
receive when the investor disposes of a given investment after a period of
years. (4) "Drainage profile group" - Soils that occur on similar
topography and have similar internal drainage. (5) "Effective tax rate" - The real property tax rate,
after the reductions under section 319.301 of the Revised Code, expressed as
per cent of actual true, market, or current agricultural use value rather than
the statutory rate expressed as mills on tax value. (6) "Equity yield" - The annual rate of return an investor
would expect on the investment above any liens or mortgages. (7) "Grid" - A cross sectional transparent scale that may
be used to measure areas on a map, etc. (8) "Land capability class" - A system of classifying land
according to physical limitations arising from slope, drainage and erosion
characteristics of the soil used by the U.S.D.A. soil conservation service. The
classes are designated by Roman numerals from I through VIII with progressive
greater limitations and narrower choices for practical use as the number
increases. Classes I through IV are suitable for general field crops. Classes V
through VIII are limited to pasture, forest land or wildlife. (9) "Land residual technique" - A technique in which the
improvements are valued independently of the land and the annual net return on
the improvements is deducted from the anticipated net annual income to the
total property. The residual net income is attributed to the land and is
capitalized to indicate the land value. (10) "Lots" - See "Tracts, lots or parcels." (11) "Mortgage equity method of capitalization" - A method
of capitalizing income that gives weight to typical mortgage and equity
financing terms for similar properties in arriving at an estimate of
value. (12) Moving average" - Average of an item for given period
of years that is recalculated each year after dropping the oldest year and
adding the latest year. (13) "Nonland production costs" - Those costs, including
management, of producing agricultural products which do not include any expense
or charge for the use of the land. (14) "Parcels" - See "Tracts, lots or parcels." (15) "Permanent pasture" - Land capability classes V through
VII that does not meet the definition of woodland and is greater than five
acres in size. In land capability classes I through IV land that due to soil
limitations, such as gullied, severe erosion, stony outcropping, etc., is not
suitable to open cultivation and does not meet the definition for woodland
shall be classified as permanent pasture. (16) "Planimeter" - A mechanical device used to measure
areas on a map. (17) "Projection period" - The period of years over which an
investment is held before being resold or refinanced. (18) "Soil management group" - A group of soils with similar
properties and crop yields. (19) "Soil mapping symbol" - Letter or numerical symbol used
to identify a soil mapping unit on a soil map. (20) "Soil mapping unit" - Areas of a soil type or types
delineated on a soil map. (21) "Soil region" - A region or area where the soils have
formed from similar parent materials under similar conditions. (22) "Soil series" - Soil on one parent material
representing one drainage profile. (23) "Soil survey" - A written report with a soil map,
describing the soils surveyed together with information on the characteristics
and capabilities of the soils. Available from the division of lands and soil,
Ohio department of natural resources or U.S.D.A. conservation
service. (24) "Soil type" - A soil which throughout its full extent
has relative uniform texture. (25) "Tracts, lots or parcels" - Tracts, lots or parcels
shall mean all distinct portions or pieces of land (not necessarily contiguous)
where the title is held by one owner, as listed on the tax list and duplicate
of the county, which are actively farmed as a unit if together the total
acreage meets the requirements of division (A)(1) or (A)(2) section 5713.30 of
the Revised Code. The terms "tracts," "lots" or "parcels" may be used
interchangeably. (26) "Woodland" - Land that has at least twenty-five per
cent shade cover from forest trees. Land that has previously met this
definition but currently does not, due to 'clear cutting,' etc., and that has
not been developed for other uses shall continue to be classified as woodland.
Forest trees are woody plants that have a well developed stem and usually more
than twelve feet in height at maturity. The area must be five acres or more in
size. Land that has been planted to forest species shall also be included in
this definition.
Last updated November 15, 2023 at 2:15 PM
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Rule 5703-25-31 | General.
Effective:
September 11, 2017
(A) Section 5715.01 of the Revised Code requires the tax
commissioner to adopt, prescribe and promulgate rules that shall: "... prescribe the method for determining the
current agricultural use value of the land devoted exclusively to agricultural
use, which method shall reflect standard and modern appraisal techniques, which
shall take into consideration: the productivity of the soil under normal
management practices; the average price patterns of the crops and products
produced to determine the income potential to be capitalized; market value of
the land for agricultural use; and other pertinent factors." (B) All tracts, lots or parcels of real property in Ohio
shall be appraised for tax purposes, at its "true value" in money and assessed
at taxable value as provided in rules 5703-25-05 to 5703-25-17 and rules
5703-25-30 to 5703-25-36. Rules 5703-25-30 to 5703-25-36 of the Administrative
Code shall apply if an application is made by the owner, as required by
sections 5713.31 and 5713.38 of the Revised Code, requesting the county auditor
to value the land, of such tracts, etc. for real property purposes at the
current value such land has for agricultural use, and the county auditor has
determined that such tracts, etc. are devoted exclusively to agricultural use
as defined in section 5713.30 of the Revised Code. (C) The current agricultural use land value can be
estimated by the capitalization of the typical net income from agricultural
crops on a given parcel of land assuming typical management, cropping patterns,
and yields for the type of soil present on the tract. Values estimated by this
method will closely approximate actual market values of farm land where the
actual highest and best use is exclusively agricultural unaffected by other
uses. (D) In order to achieve uniformity in the appraisal and
assessment of land devoted exclusively to agricultural use in the eighty-eight
counties of Ohio, the tax commissioner, after consultation with the
agricultural advisory committee shall, annually, adopt a proposed entry setting
forth the necessary modifications and values to be used in establishing the
current agricultural use value of land in counties completing a sexennial
reappraisal or that will be in the third calendar year following the year in
which a sexennial reappraisal is completed in the ensuing tax year. Said entry
shall set forth the counties in which the values prescribed shall be used and
the specific tax years in which such values apply. A public hearing shall be
held on the proposed entry after reasonable public notice has been given by the
commissioner at least thirty days prior to the date set for the hearing in such
manner and form as the commissioner determines. After the hearing the
commissioner shall adopt the entry for the ensuing tax year for use in said
counties for the next ensuing three tax years. (E) The valuations made by county auditors of said counties
in conformance with these rules and said annual entry will be accepted as
prima-facie correct valuation for parcels or tracts of land devoted exclusively
to agricultural use where the parcel and tract of land has a "true" or "market"
value reflecting a higher and better use than agricultural and the owner has
qualified under the provisions of sections 5713.30 and 5713.31 of the Revised
Code to have the land appraised and assessed by the county auditor at the
current agricultural land use value. (F) Nothing contained in these rules shall be construed as
an authorization to value parcels, qualified as provided in sections 5713.30,
5713.31, and 5713.38 of the Revised Code for tax purposes at any other value
than an identical parcel where the actual highest and best use is exclusively
agricultural unaffected by any other use. (G) Nothing contained in rules 5703-25-30 to 5703-25-36 of
the Administrative Code shall be construed as an authorization for any parcel,
in any class, in any county, to be valued for tax purposes at any other value
than its "taxable value" as set out in rule 5703-25-06 of the Administrative
Code, unless said parcel meets the qualifications of sections 5713.30, 5713.31,
and 5713.38 of the Revised Code.
Last updated November 15, 2023 at 2:15 PM
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Rule 5703-25-32 | Agricultural advisory committee.
Effective:
September 11, 2017
(A) An agricultural advisory committee shall be created to
annually advise the tax commissioner on economic, technological and other
current developments that might be considered in the determination of
agricultural land values as defined in these rules. The membership of the
committee shall be composed of a representative from such farm related
organizations and public agencies having knowledge in this field as may be
designated by the commissioner by journal entry adopted in January of each
year. The appointment to and service on the agricultural advisory committee
will be voluntary and there will be no reimbursement, by the commissioner, for
any expenses incurred by any member of said committee. (B) The purpose of the committee will be to review the
various factors considered in arriving at agricultural use land values and to
evaluate new developments in order to make a recommendation to the commissioner
as to the values and application of methods that the commissioner will set
forth in the annual entry to be used in valuing agricultural use land for the
ensuing tax year. The minutes of the meeting shall be recorded and presented to
the commissioner together with the recommendations of the committee, not later
than the first Monday in August. (C) The commissioner may consider such recommendations in
making the annual determination. However, the commissioner is not bound by such
recommendations and may, at the commissioner's option, either accept the
recommendations in full or part, or reject them in total in consideration of
the commissioner's responsibility to equalize all real property taxable values
as provided by statutes and interpreted by the supreme court of
Ohio.
Last updated November 15, 2023 at 2:15 PM
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Rule 5703-25-33 | Current agricultural use value of land table or tables.
Effective:
September 18, 2003
(A) The annual "Current Agricultural Use Value Of Land Table Or Tables" to be prescribed by the tax commissioner shall be calculated and prepared by the capitalization of the typical net income before real property and income taxes from agricultural products assuming typical management, cropping and land use patterns and yields for a given type of soil, as provided in this rule. (B) The use of the income approach to develop annual "Current Agricultural Use Value of Land Table Or Tables" that are accurate, reliable and practical requires that careful attention be given to the many principles and techniques involved. It is essential that the typical or potential net income be based on the land capability under normal or typical management practices, yields, cropping or land use patterns, prices, costs and conditions in the area rather than the management ability or decisions of an individual owner or operator. To avoid erratic fluctuations of value due to spot economic, market or climatic conditions, five year moving averages of price costs, cropping patterns and other factors shall be used where practical. In addition, the effect of changes in agricultural technology and economic relationships must constantly be revaluated. The agricultural advisory committee shall function to keep the commissioner informed of such technological and economic changes. (C) The most critical determination is the capitalization rate. This rate shall be determined by comparison of net income, calculated as described in this rule, to known prices or market value appraisals of farms that have been sold or appraised under the conditions prescribed by the definition of "Current Agricultural Use Value of Land" in rule 5703-25-30 of the Administrative Code. The synthesis of the capitalization rate by other than market data shall be by a method that gives weight to the factors present in the market for such property. (D) Information shall be obtained from such agencies as cooperative extension service, college of agriculture, the Ohio state university; Ohio agricultural research and development center; national resources conservation services, U.S.D.A.; forest service, U.S.D.A.; national agricultural statistical service, U.S.D.A.; department of agriculture of Ohio; department of natural resources of Ohio, federal land bank and other reliable sources. (E) In the absence of crop yield information for any soil mapping unit present in Ohio, the tax commissioner shall, in consultation with the department of natural resources of Ohio, determine the appropriate crop yield and soil productivity information for that mapping unit. (F) Land capability classes: Consideration shall be given to the land capability class of a soil as determined by the soil conservation service based on the soils suitability to grow various crops and potential hazards considering slope, drainage, erosion and other factors. The typical land capability class for a soil management group shall be determined and this class shall serve as a base for calculation of values when the soils in a group fall in other than typical land capability class. Usually the typical class for which the base value for a soil management group is calculated will be the class with the least hazard for the group. The major land capability classes are as follows: (1) Land adapted for crops: | Class I | No special hazards, very good land from every standpoint. | | Class II | Some hazards which require good conservation practices. | | Class III | Several intensive hazards which require intensive conservation practices. | | Class IV | Very severe hazards, needs very careful handling and management. |
(2) Land for permanent vegetation only: | Class V | Very frequent flooding or permanently wet. | | Class VI | Moderate hazards to be overcome for pasture use. | | Class VII | Severe limitations for grazing or forestry, very steep. | | Class VIII | Not suited for cultivation, pasture or forests. Wildlife and recreation is the best use. |
(G) Cropping pattern by land capability classes: The cropping pattern or proportion of different crops grown will vary with both the soil region and the land capability class. A higher percentage of row crops will be grown on the better soils with land capability class ratings such as I or II. Land in land capability class V through VIII shall be considered as devoted entirely to either pasture or woodland. Annually the commissioner shall calculate the five year moving average of each crop harvested in each of the extension areas of Ohio. A determination shall be made of the percentage of each rotation acre devoted to each crop for land capability classes I through IV. Such determination shall be made separately for: (1) Soil regions A, B, I, II, III, IV, V, and VIII. (2) Soil regions VI and VII. (3) Organic or muck soils. (H) Crop prices: Five year moving weighted average crop prices for the major field crops are to be calculated by totaling the production and value of each crop, as reported by the statistical reporting service or other reliable source, for the five years preceding the year in which the table is issued and calculating the average price per unit after consideration of price differentials in various parts of the state. (I) Management: A percentage to be determined annually shall be deducted from the five year moving weighted average crop prices to provide for typical management costs incurred by the land owner. (J) Non land production costs: Information on typical non-land production costs shall be obtained from the best available sources. Where the available information is for a base year other than the current year such prices shall be adjusted to a five year moving average basis by the use of the U.S.D.A. index of prices paid for production items, interest, taxes, and farm wage rules reported each June in U.S.D.A. agricultural prices, or other reliable sources. In developing these costs consideration shall be given to extra expense incurred by the use of more seed, fertilizer, etc., on the more productive soils. (K) Estimation of net income for a rotation acre of a given soil management group: The steps to be used in estimating net income shall be as follows: (1) The midpoint of the range of minimum yields for each major field crop is determined for each soil management group. (2) The gross income per acre for a given crop is determined by multiplying the midpoint of yield by the five year weighted average price per unit reduced by the percentage for management expense as determined under paragraph (I) of this rule. (3) The five year average non-land crop expense for the appropriate yield level is deducted from gross income to determine net income per acre. (4) The typical land capability class is estimated for each soil management group based on information from the soil conservation service and the cropping pattern assigned from paragraph (G) of this rule. This multiplied by the net return per acre gives the contribution from the crop to the rotation acre. (5) The total of the net return from each crop in the rotation is the total net return to be capitalized into land value. (L) Adjustment for land capability class other than typical for soil management group: Since the soils in a given soil management group occur in different land capability classes a method must be provided for adjusting from the typical to the non-typical situation. The following is an example of the adjustment factors to be used to adjust from the land capability class for which the net return or value per acre was actually calculated to another class by multiplying such return or value. | Adjust To | I | II | III | IV | | I | 1.00 | 1.26 | 1.79 | 3.10 | | II | .79 | 1.00 | 1.42 | 2.46 | | III | .55 | .70 | 1.00 | 1.73 | | IV | .32 | .41 | .58 | 1.00 | | V | .29 | .36 | .52 | .89 | | VI | .17 | .22 | .31 | .53 | | VII | .06 | .07 | .10 | .18 | | VIII | .03 | .04 | .05 | .09 |
Use of these factors will allow the estimation of net income per acre through the range of land capability classes for soils in a soil management group. (M) Capitalization rate: (1) For the purpose of estimating the capitalization rate to be used in determining the base values of agricultural land the use of the mortgage-equity method is prescribed. In making the rate determination the five year running average of each of the following items will be used: (a) Typical term of years, per cent of mortgage and return on farm mortgages as reported by federal land bank and other sources. (b) Return on investors equity - This shall be extracted from market data. (c) Depreciation or appreciation expected in property (agricultural land) over the next five years. The moving average of the preceding five years of percentage increases or decreases in U.S.D.A. farm real estate index for Ohio for March of each year over the previous year shall be considered as the estimate of this term. In the consideration of the weight to be given to this item the effect of speculation should be removed so that the appreciation that accrues in land values over a five-year period from improvement in agricultural technology and practices only is reflected. (2) After these terms have been determined the over all capitalization rate shall be calculated by reference to compound interest tables. To the capitalization rate adjusted for land only shall be added the effective real property tax rate. This is to be determined by multiplying the five year average state tax rate as shown in department of taxation records by thirty-five per cent and expressed as a percentage. This rate shall be further reduced to reflect the average effect of the reductions required by section 319.301 of the Revised Code. The total of the two rates is the agricultural land capitalization rate. This should represent the rate of return a prudent investor would expect on an average or typical Ohio farm considering only agricultural factors. (3) Since capitalization rates will vary with the land capability class due to the difference of risk and operating costs market studies shall be designed to determine such differential in rates. (4) The per acre value of each soil category will be determined by dividing the net return per acre by the appropriate rate. Values in classes I through IV shall be the values for cropland. If land in these classes is used for other purposes such as forestry or pasture the cost of converting from present use to crop use shall be deducted. Values in classes V through VII shall be the value for pasture and woodland.
Last updated November 15, 2023 at 2:15 PM
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Rule 5703-25-34 | Use of prescribed agricultural use value of land tables by county auditor.
Effective:
January 12, 2018
(A) After the county auditor has determined that the
application or amended application for the auditor to value land at its
agricultural use, filed as provided by sections 5713.31 and 5713.38 of the
Revised Code is complete and the information thereon is correct the auditor
shall, prior to the first Monday in June, view or cause to be viewed the land
described in the application and determine whether the land is devoted
exclusively to agricultural use as defined in division (A) of section 5713.30
of the Revised Code. If the auditor, as of the first Monday in June, determines
that the land is devoted exclusively to agricultural use the auditor shall
appraise it for real property tax purposes as provided in this
chapter. (B) The first step in the appraisal of land used
exclusively for agricultural use is to determine from county soil survey maps,
soil maps of individual farms prepared by the division of land and soil of the
department of natural resources of Ohio and/or the soil conservation service,
U.S.D.A., or other sources of information the different soil types, land
capability classes and land uses together with the acreage in each category for
the tract or parcel. Where detailed soil surveys are not available the county
auditor shall consult with the soil conservation service and other
knowledgeable sources on the most practical way to utilize the prescribed
tables. (C) Soil scientists, in preparing a detailed soil survey or
individual soil conservation maps indicate different soil categories by
"mapping units" shown on the map by the "map symbol" with the area included in
this unit outlined. As an example, in the soil survey of Fayette County,
recently released, "CaB2" is the map symbol for "Cana silt loam" occurring on a
two to six per cent slope, moderately eroded and further described as having a
"Land Capability Class II" rating. While there might be some variance all soil
maps follow a standard system of notation. (D) After delineation of the boundaries of the farm or
tract on the soil map the acreage in each soil type and land capability class
can be measured with a grid or planimeter. The standard soil survey map uses a
scale of four inches to a mile, thus each square inch is equal to forty acres
and a quarter square inch is equal to ten acres. The enlargement of soil maps
to a scale of eight inches to a mile will allow for more accurate estimation of
soil areas. Isolated areas of five acres or less in a mapping unit may be
classified with the mapping unit surrounding it or adjacent. When each soil
type and land capability class has been identified and the acreage determined
the information is to be listed on the property record card. It should be noted
that once this information is initially recorded and verified that a permanent
inventory of soil information will have been established for a parcel, with
very few exceptions, unless the property boundaries are changed. (E) If a particular soil type is not included in the
"current agricultural use value of land table or tables" prescribed by the tax
commissioner for the given year, in said county as described in rule 5703-25-33
of the Administrative Code, then the county auditor shall contact the tax
commissioner to secure the per acre unit value for the soil type. The tax
commissioner shall then compute a use value as prescribed in rule 5703-25-33 of
the Administrative Code for that soil type. (F) Since land capability classes I through IV are suitable
for general field crops the cropland price shall be used for soil areas in
these classes unless an investment in capital such as clearing or drainage is
needed to convert the land from its present use such as woods to tillable
cropland. If by simply plowing, etc. the land can be converted no adjustment is
needed. Where such adjustment is needed it shall be made by using the per acre
value of cropland for the next highest numbered land capability class for the
specific mapping unit until the land is converted to cropland use. Woodland
prices for classes I through IV in the prescribing tables allow for clearing
and drainage in classes I and II and clearing in classes III and IV. Land
capability classes V through VIII are priced as pasture or woodland according
to prescribed tables. In the classification of the various soil types
into soil management groups and the calculation of minimum yields under good
management the hazards of the various soil types such as drainage, erosion,
shallow, droughty or stony soils has been recognized and accounted for. (G) Farm ponds shall be priced as class V pasture land in
the appropriate soil management group. Reclaimed strip mine land often has a
better agricultural potential than in its original state depending on the
geological origin of the soil. Until better means are devised reclaimed strip
mine land used as cropland shall be priced as class IV land or such other
classification as may be determined based on the slope of the ground and other
soil characteristics or properties. If in wood and pasture classify as class VI
in the proper use unless another classification is justified as previously
stated. Unreclaimed strip mine land, gravel pits, etc. unsuitable for
agricultural use shall be priced as class VIII land. (H) Where special "agricultural uses" are peculiar to and
typical of an area, individual appraisals must be made to determine the
agricultural use land value. In some cases, for example, a greenhouse operation
in an urban location, the agricultural land value can be determined by the use
of the land residual appraisal technique using the present special agricultural
use as the highest and best use. The income stream attributed to the land would
then be capitalized to determine the agricultural use land value. The land
residual technique is extremely sensitive therefore caution must be used to be
certain that the net income capitalized is typical for the specific
usage. (I) One acre for each residence on a parcel shall be valued
as a homesite in the same manner as similar homesites in the area on a market
value basis. Land shall not be valued on a homesite basis unless there is a
building or a house trailer used for human habitation located on such parcel.
Improvements including residences, agricultural service and other buildings are
valued and assessed as provided in rules 5703-25-05 to 5703-25-17 of the
Administrative Code. (J) The county auditor shall deduct from the value of each
separate parcel of real property the amount of land occupied and used by a
canal or used as a public highway as provided in section 5713.04 of the Revised
Code. (K) The agricultural use land value shall be the total of
values extended by application of unit values from the "Current Agricultural
Land Use Tables" and the value of the homesites. The total "agricultural use
land value" is entered on the real property record required by section 5713.03,
of the Revised Code, together with the "true value" of the land as determined
in accordance with Section 2, Article XIII of the Ohio Constitution. Any
difference in value shall be noted on the real property record. (L) Where adjustment in values is needed due to hazards,
such as floods, weed infestation, etc., peculiar to a specific tract the
auditor has the authority to make such adjustment or in the event the land
value of a parcel or tract, as calculated from the "current agricultural use
value of land tables," exceeds or is less than the value indicated by the sale
of the parcel or comparable properties in the area where the consideration was
determined under the conditions prescribed by the definition of "Current
Agricultural Use Value of Land" in rule 5703-25-30 of the Administrative Code
the current agricultural use value of land shall be determined on the basis of
such sale or sales.
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Rule 5703-25-35 | Determination of current agricultural use taxable value of land and total taxable value of parcels in counties that completed sexennial reappraisals for tax year 1972 or later.
Effective:
January 12, 2018
In counties that have completed a sexennial
reappraisal of real property for taxable purposes in 1972 or later the
agricultural use land taxable value shall be the same percentage of
agricultural use land value as that prescribed by rule 5703-25-06 of the
Administrative Code, or any future revision of such rule, currently thirty-five
per cent, to determine taxable value of all other taxable real property. The
total taxable value of the parcel shall be calculated by adding the current
agricultural use land taxable value to the taxable value of the improvements
determined as required by rule 5703-25-06 of the Administrative Code.
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Rule 5703-25-36 | Application of rules.
Effective:
January 12, 2018
(A) Rules 5703-25-30 to 5703-25-36 of the Administrative
Code shall be applied in valuing and assessing land that has qualified to be
valued at the current value such land has for agricultural use under the
provisions of sections 5713.30 to 5713.38 of the Revised Code for the tax year
1978, and thereafter, with respect to taxes which become a lien January 1,
1978, and thereafter. (B) Nothing contained in these rules shall be construed as
an authorization to value parcels, qualified as provided in sections 5713.30 to
5713.38 of the Revised Code for tax purposes at any other value than an
identical parcel where the actual highest and best use is exclusively
agricultural unaffected by any other use. (C) Nothing contained in rules 5703-25-30 to 5703-25-36 of
the Administrative Code shall be construed as an authorization for any parcel
in any class in any county to be valued for tax purposes at any other value
than its "taxable value" as set out in rule 5703-25-06 of the Administrative
Code unless said parcel meets the qualification of sections 5713.30 to 5713.38
of the Revised Code.
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Rule 5703-25-45 | Tax reduction factor; computation; minimum for schools.
Effective:
January 12, 2018
(A) As used in rules 5703-25-45 to 5703-25-49 of the Administrative Code: (1) "Tax reduction factor" means the percentage reduction in each real property tax levy of each taxing unit for each class of real property for which a reduction is required and computed under section 319.301 of the Revised Code and this rule. (2) "Emergency school levy" means a tax authorized under section 5705.194 of the Revised Code. (3) "Taxes charged and payable" means the amounts for the current year remaining after the reduction required under section 319.301 of the Revised Code but prior to any reduction required under section 319.302 of the Revised Code. It does not include assessments, recoupment charges imposed under section 5713.34 of the Revised Code, taxes charged for a prior year, or penalties and interest on delinquent taxes. (4) "Carryover property" means all real property on the current year's tax list except: (a) Land and improvements that were not taxed by the district in both the preceding year and the current year; (b) Land and improvements that were not taxed in the same class in both the preceding year and the current year; (c) Land and improvements that were exempt from taxation under a statute granting exemption or abatement from taxation in the preceding year and which are included on the tax list in the current year. (5) "Real property" means real property as defined in section 5701.02 of the Revised Code and includes real property owned by a railroad or other public utility. (6) "Taxing unit" means a political subdivision of the state authorized by statute to levy taxes on real property. (7) "Taxing district" means a municipal corporation or township, or part thereof, in which the aggregate rate of taxation, as expressed in mills, is uniform. (8) "Net taxes" means the taxes charged and payable for a tax year. In the case of a school district or a joint vocational school district, the net taxes of a prior year equal the taxes charged and payable for that year after the reductions required under section 319.301 of the Revised Code, including any adjustment required for the district under division (E) of that section and paragraph (E) or (F) of this rule. In the case of a tax levy for which an estimated tax reduction factor is used pursuant to division (H) of section 319.301 of the Revised Code and paragraph (A) of rule 5703-25-48 of the Administrative Code, the net taxes of a prior year excludes the amount of taxes attributable to any portion of the tax reduction factors used in that year to adjust for an overpayment or underpayment of taxes in the second preceding year caused by the use of such estimated factors. (9) "Replacement levy" means a tax levied by a joint vocational school district under section 3311.21 of the Revised Code or a tax levied for emergency medical service under section 5705.191 of the Revised Code and designated as a replacement levy in the ballot language used to submit the levy for voter approval. A replacement levy cannot be submitted for any other purpose. (B) (1) A tax reduction factor shall be applied to reduce each voted tax levy on each class of real property except those taxes excluded in paragraph (B)(2) of this rule. (2) Tax reduction factors shall not be computed for and used to reduce: (a) Taxes levied within the ten-mill limitation provided by section 5705.02 of the Revised Code; (b) Taxes authorized to be levied by the provisions of a charter adopted by a municipal corporation; (c) Taxes levied at whatever rate is necessary to pay the interest on and principal of indebtedness; (d) Taxes levied as an emergency school levy. (C) Each year the tax commissioner shall make the annual determinations required under section 319.301 of the Revised Code. A separate determination shall be made for each tax levy for each class of property within each taxing unit. Determinations shall be made for a taxing unit regardless whether it contains territory located in a county whose property is subject to an assessment reviewed by the tax commissioner in that year under section 5715.24 of the Revised Code. The two classes of property for which a separate determination is made are: (1) Lands and improvements thereon used for residential or agricultural purposes which shall be called "residential/agricultural real property" (2) All other land and improvements thereon and minerals and mineral rights which shall be called "nonresidential/agricultural real property." (D) (1) The tax commissioner shall compute a tax reduction factor for each tax levied by each taxing unit on each class of real property for each tax except taxes described in paragraph (B)(2) of this rule. The tax reduction factor shall equal the per cent by which the sums levied by each tax against the carryover property in each class of real property would have to be reduced so that the current year's taxes on carryover property equals the prior year's net taxes. (2) A tax is levied for the first time in the year for which it is first authorized by the voters to be extended on the tax list and duplicate. In the case of taxes levied for the first time, the tax commissioner shall compute the tax reduction factor as follows: (a) In the first year of a tax authorized to be levied as a renewal of a tax that has expired, the tax reduction factor for that tax shall equal the per cent by which the sums levied by the renewed tax against the carryover property in each class of real property would have to be reduced so that the current year's net taxes on carryover property equals the prior year's net taxes on that class of property. If a tax is renewed at a rate that is less than the rate at which the tax expired, the tax reduction factor for the first year in which the tax is levied as a renewal shall equal the per cent by which the sums levied by the renewed tax would have to be reduced so that the net taxes on carryover property derived in the current year from the renewed rate equals the net taxes that would have been derived in the prior year from the same rate. (b) In the first year of a tax authorized to be levied as an additional tax or as a tax designated as a replacement levy, the tax reduction factor shall equal the per cent by which the sums levied by the additional tax or replacement levy against the carryover property in each class of real property would have to be reduced so that the current year's net taxes on carryover property equals the net taxes that would have been levied on that class of property in the preceding year, if such tax had been in effect in that year without any reduction under section 319.301 of the Revised Code. (c) In the first year of a tax authorized to be levied both as a renewal of a levy that has expired and as an additional tax, the portion of the tax that is a renewal shall have a tax reduction factor computed in accordance with paragraph (D)(2)(a) of this rule, and the portion of the tax that is an additional tax shall have a tax reduction factor computed in accordance with paragraph (D)(2)(b) of this rule. (3) A tax is a renewal of an existing tax, an additional tax, or a replacement levy according to its designation in the actual ballot language submitted to the voters unless such designation is deceptive or contrary to law. (4) If a taxing unit has elected not to impose a tax authorized by the voters for one or more years and then elects to impose it in the current year, the tax reduction factor for that year shall be computed as though the tax had been levied and adjusted under section 319.301 of the Revised Code in each year it was authorized at the rate used in the current year. (E) Each school district is guaranteed an effective tax rate for current expenses equal to two per cent of the taxable value of each class of real property in the district. In the case of a school district whose total tax rate for current expenses as authorized, is less than two per cent, the guarantee equals only the maximum effective rate so authorized by the voters of the district. Example: A school district is authorized to levy five unvoted mills for current expenses. The voters have approved an additional ten mills. The district's guaranteed effective rate is one and one-half per cent (fifteen mills) because that is the maximum authorized rate. Annually, for each class of property for each school district, the commissioner shall determine whether adjustments to the tax reduction factors of the district's taxes are necessary to guarantee that the district levies its guaranteed effective tax rate for current expenses. This determination shall be made as follows: (1) Using the tax reduction factor determined under division (D) of section 319.301 of the Revised Code and paragraph (D) of this rule, the commissioner shall compute the sum of the taxes charged and payable for current expenses by the voted tax levies of that district; (2) The commissioner shall determine the total taxes charged and payable within the ten-mill limitation for the current expenses of the district; (3) The commissioner shall determine the difference between the amount in paragraphs (E)(3)(a) and (E)(3)(b) of this rule. However, if the difference obtained by subtracting the amount in paragraph (E)(3)(b) of this rule from the amount in paragraph (E)(3)(a) of this rule is a negative number, then the amount determined under this paragraph is zero. (a) From the total taxes charged and payable on the tax list against the property of that school district for tax year 1981, after making any reduction required in that year under section 319.301 of the Revised Code, but prior to making any reduction under section 319.302 of the Revised Code, for the current expenses of a joint vocational school district of which the school district is a part in the current year; subtract, (b) The following percentage of the taxable value of all real property in the appropriate class of real property: (i) In 1987, five one-hundredths of one per cent (.0005); (ii) In 1988, one-tenth of one per cent (.001); (iii) In 1989, fifteen one-hundredths of one per cent (.0015); (iv) In 1990 and each subsequent year, two-tenths of one per cent (.002). (4) The sum of the amounts determined in paragraphs (E)(1), (E)(2), and (E)(3) of this rule equals the unadjusted total taxes of the school district for current expenses in the current year. This total should always exclude emergency school levies and debt levies, except as provided in rule 5703-25-49 of the Administrative Code. (5) The commissioner shall compare the amount shown as the unadjusted total taxes of the school district for current expenses in paragraph (E)(4) of this rule to the amount obtained by multiplying the total taxable value of all real property in the same class of real property by two per cent. (a) If the unadjusted total taxes for current expenses of the district charged against the class of real property is more than two per cent of the taxable value of real property in that class, the tax reduction factors for that class are the percentage determined in paragraph (D) of this rule. No adjustment is required. (b) If the unadjusted total taxes for current expenses of the district charged against that class of real property are less than two per cent of the taxable value of real property in that class, the commissioner shall adjust the tax reduction factors for that class determined under paragraph (D) of this rule by a uniform percentage so that the total taxes for current expenses of the district prior to the reduction under section 319.302 of the Revised Code shall equal exactly two per cent of the taxable value of real property in that class. (c) In the case of a school district whose total authorized tax rate for current expenses is less than two per cent, if the unadjusted total taxes for current expenses of the district charged against that class of real property are less than the total authorized rate for current expenses multiplied by the taxable value of real property in that class, the commissioner shall adjust the tax reduction factors for that class determined under paragraph (D) of this rule by a uniform percentage so that the total taxes charged and payable for current expenses of the district produce an effective tax rate equal to the district's authorized tax rate for current expenses. (6) If the commissioner is required to make the adjustment specified under paragraph (E)(5)(b) or (E)(5)(c) of this rule, the commissioner shall certify the tax reduction factors computed under the appropriate paragraph to the county auditor, and the factors certified shall replace the tax reduction factors determined under paragraph (D) of this rule, and the adjusted percentages so certified shall be the tax reduction factors for that class of property for all purposes. (7) When the tax reduction factors for a school district's taxes are factors certified under paragraph (E)(6) of this rule, the taxes charged and payable after making the reductions required by such factors equals the net taxes of the school district for that year. (F) Each joint vocational school district is guaranteed a minimum amount of taxes. This guaranteed amount of taxes is called the "designated amount." (1) The designated amount for each class of real property in a joint vocational school district equals the taxable value of all real property in that class subject to taxation by the district multiplied by the lowest of the following: (a) Two-tenths of one per cent; (b) The district's effective tax rate plus the following percentage: | Taxes Charged For | Add The Following Percentage | | 1987 | 0.025% (0.00025) | | 1988 | 0.050% (0.00050) | | 1989 | 0.075% (0.00075) | | 1990 | 0.100% (0.00100) | | 1991 | 0.125% (0.00125) | | 1992 | 0.150% (0.00150) | | 1993 | 0.175% (0.00175) | | 1994 and thereafter | 0.200% (0.00200) |
(c) The district's authorized tax rate. (2) Annually, for each class of property for each joint vocational school district, the commissioner shall determine whether adjustments to the tax reduction factors of the district's taxes are necessary to guarantee that the district levies its designated amount of taxes. This determination shall be made for each class of property as follows: (a) Using the tax reduction factor determined under division (D) of section 319.301 for the Revised Code and paragraph (D) of this rule, the commissioner shall compute the sum of the taxes charged and payable by the levies of that district. This sum equals the district's total unadjusted taxes. (b) The commissioner shall compare the unadjusted taxes of the district determined in paragraph (F)(2)(a) of this rule to the designated amount for that district for the current year. (i) If the unadjusted total taxes charged against the real property in that class for the district are more than the designated amount, then the tax reduction factors for that class are the percentage determined under paragraph (D) of this rule. No adjustment is required. (ii) If the unadjusted total taxes of the district charged against that class of real property are less than the designated amount for that class in the district, the commissioner shall adjust the tax reduction factors for that class determined under paragraph (D) of this rule by a uniform percentage so that the total taxes charged and payable against that class of property shall exactly equal the designated amount for that class in that district. (3) If the commissioner is required to make the adjustment specified in paragraph (F)(2)(b)(ii) of this rule, the commissioner shall certify the tax reduction factors computed under that paragraph to the county auditor, and the factors certified shall replace the tax reduction factors determined under paragraph (D) of this rule, and the adjusted percentages so certified shall be the tax reduction factors for that class of property for all purposes. (G) No reduction shall be made under this rule in the rate at which any tax is levied. (H) No tax reduction factor certified under paragraph (E)(6) of this rule shall cause a tax to be imposed at an effective rate greater than that originally authorized for that tax by the voters of a school district.
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Rule 5703-25-46 | Tax reduction factor; certification; composite factor.
Effective:
January 12, 2018
As used in this rule and rule 5703-25-47 of the
Administrative Code, "composite tax reduction factor" means the total
percentage reduction in the taxes charged against each tract, lot, or parcel in
a given class of real property located in a given taxing district provided
under section 319.301 of the Revised Code and rule 5703-25-45 of the
Administrative Code. (A) At the time the county auditor submits the abstract of
real property as required under section 5715.23 of the Revised Code, the
auditor shall furnish the information required by the tax commissioner to
compute the tax reduction factors or adjustments under divisions (D) and (E) of
section 319.301 of the Revised Code. The auditor shall supplement this
information as requested by the commissioner, or by the last day of November if
a tax approved at the November election is to be extended on the current year's
tax list and duplicate. (B) (1) Upon receiving the necessary information from the
auditor the commissioner shall determine the tax reduction factor for each tax
for each class of real property as required under rule 5703-25-45 of the
Administrative Code. The commissioner shall certify the tax reduction factors
to the county auditor and the county treasurer as soon as the commissioner
determines them. (2) In addition, for each class of real property, the
commissioner shall determine a composite tax reduction factor for each taxing
district as provided in paragraph (C) of this rule. The commissioner shall
certify the composite tax reduction factors to the county auditor and the
county treasurer as soon as he determines them. (C) The purpose of the composite tax reduction factor
computed under this paragraph is to provide a total percentage reduction in
taxes to be applied uniformly to the real property in each class of real
property in a taxing district for the collection of taxes only. The commissioner shall compute the composite tax
reduction factor for each class of real property in each taxing district as
follows: (1) Multiply each tax reduction factor applied to a tax
levied for the current year in the district by a quotient, the numerator of
which is the number of tax mills of the levy to which that factor applies and
the denominator of which is the total number of mills levied on the
district; (2) Cumulate the products obtained in paragraph (C)(1) of
this rule. The sum obtained in this paragraph is the
composite tax reduction factor. (D) In preparing the tax list and duplicate, the county
auditor shall extend on the tax list and duplicate the composite tax reduction
factor for all property in each class of real property in a taxing district
certified under paragraph (B)(2) of this rule for that class in that taxing
district. (E) In preparing the tax bill required under section
323.131 of the Revised Code, the county treasurer shall use the composite tax
reduction factor certified under paragraph (B)(2) of this rule for the
appropriate class of real property and taxing district. The treasurer shall
certify to the commissioner a list of the composite tax reduction factors
actually used on the tax bills sent pursuant to section 323.13 of the Revised
Code. (F) No county auditor shall use a composite tax reduction
factor other than the composite tax reduction factor certified to the auditor
under paragraph (B)(2) of this rule, and no county treasurer shall prepare a
tax bill using a composite tax reduction factor other than the appropriate
composite tax reduction factor certified to the treasurer under paragraph
(B)(2) of this rule. (G) If a tax reduction factor or composite tax reduction
factor appears to be illegal or erroneous, the county auditor shall notify the
tax commissioner, who shall recompute the factor and certify it to the county
auditor as provided in paragraph (B)(2) of this rule.
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Rule 5703-25-47 | Tax reduction factor; allocating taxes collected from each tax levy.
Effective:
April 12, 2019
For the purpose of ascertaining the net amount of taxes collected for
each particular tax levy, pursuant to section 319.451 of the Revised Code, the
county auditor shall use the tax reduction factors certified under paragraph
(B)(1) of rule 5703-25-46 of the Administrative Code. The composite tax reduction factors certified under paragraph (B)(2)
of that rule shall never be used for this purpose.
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Rule 5703-25-48 | Tax reduction factor; estimated factors; correcting errors.
Effective:
April 12, 2019
(A) (1) If the commissioner is unable to certify a tax
reduction factor for either class of real property in a taxing unit located in
more than one county by the last day of November because the information
required under division (G) of section 319.301 of the Revised Code is
unavailable, he shall determine and certify estimated tax reduction factors for
taxes levied by that taxing unit. The estimated tax reduction factors shall be
based on an estimate of the unavailable information. (2) The commissioner shall also determine and certify
estimated composite tax reduction factors for each taxing district by using the
tax reduction factors estimated in paragraph (A)(1) of this rule. (3) Upon receipt of the actual information for a taxing
unit that used estimated tax reduction factors, the commissioner shall compute
the actual tax reduction factors and the composite tax reduction factors for
those taxing districts in which the taxing unit is located. Using these actual
tax reduction factors, the commissioner shall compute the taxes that should
have been charged and payable against real property in that class for the year
for which the estimated tax reduction factors were used. (4) For the current tax year following the tax year for
which the estimated tax reduction factors were used, the commissioner shall add
to or subtract from the amount of taxes due for that current year the amount of
underpayment or overpayment that resulted in the preceding tax year from the
use of the estimated tax reduction factors. (B) This paragraph applies to all circumstances other than
the use of an estimated tax reduction factor as provided in paragraph (A) of
this rule. If the tax commissioner determines that the tax
reduction factors or the composite tax reduction factor for either class of
real property used on the tax bills for the first half collection of real
property taxes was illegal or erroneous, the commissioner may order a
correction at any time prior to the mailing of the tax bill for the second half
collection of taxes for the same tax year. The correction shall adjust the tax reduction
factors and the composite tax reduction factor used on the tax bills for the
second half collected for such year so that the sum of the taxes charged
against each parcel of property in the first half collection and the second
half collection equals the total amount of taxes that should have been charged
against such property for that tax year if a correct and legal tax reduction
factor had been used on the tax bill for both collection periods. (C) If the tax commissioner determines that the tax
reduction factors or the composite tax reduction factor for a class of property
was illegal or erroneous after the time for a correction permitted under
paragraph (B) of this rule, the commissioner shall determine the correct tax
reduction factor that should have been used for that year. In computing tax
reduction factors for the following tax year, the commissioner shall use, as
the net taxes for the year for which the illegal or erroneous tax reduction
factors were used, the amount of net taxes for that year if the correct tax
reduction factors had been used. Except as provided in division (H) of section
319.301 of the Revised Code and paragraph (A) of this rule, the commissioner
shall not adjust the tax reduction factors for such subsequent tax year in
order to add to or subtract from the taxes charged and payable for that year
any amount that represents an overpayment or underpayment resulting from the
use of the illegal or erroneous tax reduction factor in the preceding
year.
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Rule 5703-25-49 | Tax reduction factor; emergency school levy phase-in.
Effective:
April 12, 2019
The tax commissioner shall include emergency school levies authorized
by the voters prior to January 1, 1985, as current expenses of a school
district in making the computations required under paragraph (E) of rule
5703-25-45 of the Administrative Code for tax years 1986, 1987, and 1988. The
exclusion of such levies from that computation as provided in paragraph (E)(4)
of that rule shall apply to all emergency school levies authorized by the
voters on or after January 1, 1985.
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Rule 5703-25-55 | Real estate assessment fund; expenditures; allowable; disallowable; procedures.
Effective:
April 12, 2019
(A) Allowable expenditures from the real estate assessment fund
include the costs incurred by the county auditor described in paragraph (B) of
this rule and, at the discretion of the county auditor, the costs incurred by
the county auditor described in paragraph (C) of this rule, and the costs
incurred by the county board of revision under Chapter 5715. of the Revised
Code. (B) Allowable expenditures by the county auditor from the real
estate assessment fund consist of all costs incurred by the auditor related to
the assessment of real property for taxation purposes, whether for the
determination of "true value in money" or "true value" of all real property as
defined in paragraph (A) of rule 5703-25-05 of the Administrative Code, or for
the determination of "current agricultural use value of land" as defined in
paragraph (B)(2) of rule 5703-25-30 of the Administrative Code, and for the
assessment of manufactured or mobile homes taxed like real property under
division (D)(2) of section 4503.06 of the Revised Code. Allowable expenditures
may be made for the following: (1) Contracts for the professional services of an appraiser,
which includes contracts for a complete or partial appraisal, either for a
sexennial reappraisal, triennial update, annual maintenance, or for any other
special appraisal contract, for the appraisal of manufactured or mobile homes
taxed like real property, and for any appraisal consulting
contracts. (2) Contracts for the preparation of tax maps, which includes,
but is not limited to, pilot projects, aerial photography, and the complete
computerized appraisal mapping program with digital map files. (3) Contracts, in whole or in part, for the purchase or lease of
computer hardware and software, and the maintenance thereof, including
consulting contracts related to the same, used in the real property assessment
process. (a) Computers purchased or leased pursuant to this paragraph can
be used to store property record card data, to update property values
statistically, to print various abstracts of real property values, to type and
print various valuation notices and taxpayer letters, and to perform other
assessment-related functions. (b) In the case where the computer contract is for both
assessment-related and nonassessment-related goods or services, the portion of
computer hardware, software, maintenance, and consulting costs related to
assessment purposes may be determined based on the percentage of time used for
assessment-related purposes, on the percentage of disc space utilized for
assessment-related activities, or a combination of both items, or on any other
reasonable method. The applicable apportionment method is subject to the
approval of the tax commissioner, which shall be final. (4) In-house assessment-related expenses of the county auditor,
in whole or in part, for real property, machinery, equipment, supplies,
vehicles, utilities, and employee salaries and benefits. Costs for property,
utilities, and personnel used for both assessment and nonassessment purposes
may be paid out of the real estate assessment fund to the extent that they are
allocable to the assessment-related use. Costs for property, utilities, and
personnel can only be considered as assessment-related, if the property,
utility, or person is used directly in the real estate assessment process, or
used directly in the assessment of manufactured or mobile homes taxed like real
property. (5) The cost to implement a permanent parcel numbering
system. (6) The cost to attend assessment-related seminars, continuing
education courses, and conferences. (7) The cost to update plat books and property record
cards. (8) Appraisal costs incurred by the county auditor to support
values for real property and manufactured or mobile homes taxed like real
property in administrative or judicial proceedings. (9) The cost to prepare and print the real property tax list, the
exempt real property list, the agricultural land tax list, and the portion of
the manufactured home tax list that relates to the manufactured or mobile homes
taxed like real property. (10) Costs related to real property and manufactured or mobile
home transfers. (11) Costs incurred by the county auditor for the in-house
preparation of tax maps. (12) Costs related to the imaging or sketching of real property,
and manufactured or mobile homes taxed like real property, on any
medium. (13) Costs to prepare and print various abstracts of real property
values, valuation notices, and taxpayer letters. (14) Costs related to the application and determination process
for the current agricultural use valuation program described in sections
5713.31 to 5713.38 of the Revised Code. (C) Other expenses allowable from the real estate
assessment fund, at the discretion of the county auditor, may be divided into
two categories: costs associated with activities of the county auditor related
to real estate, but not to the assessment thereof by the county auditor; and
costs associated with activities of the county auditor not related to real
estate at all. (1) Costs associated with activities related to real
estate, but not to the assessment thereof by the county auditor, include costs
incurred by the auditor for the following activities: (a) Costs in preparing the tax list of real and public
utility property. (b) Costs in administering laws related to the taxation of
real property, which include, but are not limited to, calculation of tax rates
and taxes, preparation and printing of the tax duplicate and the delinquent tax
lists and reports, tax settlement between county auditor and county treasurer,
and distributions of tax settlements. (c) Costs in administering laws related to the levying of
special assessments on real property. (d) Costs in administering the tax reduction factors and
the ten per cent rollback under Chapter 319. of the Revised Code. (e) Costs in administering the homestead exemption on real
property and the two and one-half percent rollback on real property and
manufactured or mobile homes taxed like real property under Chapter 323. of the
Revised Code. (f) Costs in administering the homestead exemption on
manufactured or mobile homes under section 4503.065 of the Revised
Code. (g) Nonappraisal costs to support values of real property
in any administrative or judicial proceeding (h) Costs for geographic information systems, mapping
programs, and technological advances in those or similar systems or
programs. (2) Costs associated with activities not related to real
estate, occurring in the county auditor's office, include costs incurred by the
auditor for the following activities: (a) Costs in compiling the general tax list of tangible
personal property and administering tangible personal property taxes under
Chapters 5711. and 5719. of the Revised Code, which include, but are not
limited to, processing tangible personal property tax returns, assessing
tangible personal property, and compiling the tangible personal property tax
duplicates. (b) Costs, expenses, and fees in the administration of
estate taxes under Chapter 5731. of the Revised Code. (D) Expenditures
not allowable from the real estate assessment fund may be divided into two
categories: costs associated with activities of the county auditor related to
real estate, but not to the assessment thereof by the county auditor; and costs
associated with activities of the county auditor not related to real estate at
all. (1) Costs associated with activities related to real estate, but
not to the assessment thereof by the county auditor, include, but are not
limited to, costs for the following activities: (a) Preparation and printing of the tax bills and the daily
payment journal; (b) The appraisal of real property for purposes other than
the determination of current, true market value; for example, to determine the
historical value or insurance value of county buildings; (c) The county auditor's salary, pursuant to section 325.01
of the Revised Code; (d) Administrative expenses of the county budget
commission; and (e) Expenses of the county engineer incurred in the
drafting of tax maps, pursuant to section 5713.10 of the Revised
Code. (2) Costs associated with activities not related to real estate,
occurring in the county auditor's office, include, but are not limited to,
costs for the following activities: (a) Payroll; (b) Disbursement cycle: (c) Any licenses; (d) Manufactured home tax, except as provided in paragraphs
(B) and (C) of this rule; (e) General relief; (f) Budgetary and fiscal process; (g) Weights and measures; and (h) Building maintenance. (E) If the county
auditor intends to spend money from the real estate assessment fund for any
costs not specifically allowed under paragraph (A), (B), or (C) of this rule or
specifically disallowed under paragraph (D) of this rule, the auditor must
first seek approval from the tax commissioner upon the filing of a form
prescribed by the tax commissioner for that purpose. (F) Under the
general authority of section 5713.01 of the Revised Code, if the board of
county commissioners fails to appropriate sufficient money for the county
auditor's assessment activities, the auditor may apply to the tax commissioner
for an additional allowance for the type of expenditures listed in paragraph
(B) of this rule. However, under division (B) of section 325.20 of the Revised
Code this right to apply to the tax commissioner is not available for certain
travel outside this state. Under this latter section, the county auditor must
apply to the board of county commissioners in writing showing the necessity of
the travel and the probable costs to the county from the real estate assessment
fund for any out-of-state travel, if those travel expenses will or may exceed
one hundred dollars. The board shall approve or disapprove the auditor's
request. The board's decision is final. (G) Under division
(B) of section 325.31 of the Revised Code, a copy of any appraisal plans,
progress of work reports, contracts, or other documents required to be filed
with the tax commissioner shall be filed also with the board of county
commissioners. This requirement includes the DTE form 108, the DTE form 92, any
contracts listed on the form 92, any applications for additional allowances
filed pursuant to section 5713.01 of the Revised Code, any forms filed pursuant
to paragraph (E) of this rule, and any other documents requested by the tax
commissioner relating to the real estate assessment fund. This requirement
applies to any person filing the document with the tax commissioner: whether
that person is, for example, the county auditor, an individual appraiser, an
appraisal firm, a consultant, or a computer firm.
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Rule 5703-25-56 | Real estate assessment fund; competitive bidding requirement.
Effective:
April 12, 2019
(A) Under division (F) of section 5713.01 of the Revised Code,
any contract for goods or services related to the auditor's duties as assessor,
except those for the professional services of an appraiser, shall be awarded
pursuant to the competitive bidding procedures set forth in sections 307.86 to
307.92 of the Revised Code. Examples of contracts that require competitive
bidding include, but are not limited to, contracts for mapping, computers, and
reproduction on any medium of any documents, records, photographs, microfiche,
or magnetic tapes. The only assessment-related contracts of the county auditor
that are not subject to the competitive bidding procedures are the contracts
for the professional services of an appraiser. (B) Contracts that contain both the professional services of an
appraiser and computer, mapping, reproduction, or any other services that are
not the professional services of an appraiser are subject to the competitive
bidding procedures mentioned above. (C) A contract to purchase computer software is not a contract
for the professional services of an appraiser and is subject to the competitive
bidding procedures. A contract to purchase computer software includes a
contract for computer programming services to create or modify computer
software. (D) If an appraiser uses computer hardware or software, either
the appraiser's own or the county's equipment, in the performance of the
appraisal services, all the services are deemed to be appraisal services, and a
contract for such services is not subject to the competitive bidding
procedures. (E) Any contract, whether in whole or in part, for the
preparation of tax maps as defined in paragraph (B)(2) of rule 5703-25-55 of
the Administrative Code is subject to the competitive bidding procedures
mentioned above, even if the services contained therein might otherwise be
considered to be the professional services of an appraiser, and even if the
services are performed by engineers, surveyors, consultants, or others who
would otherwise be exempted from competitive bidding by section 307.86 of the
Revised Code. (F) Any contract for the assessment-related services of a person
who is not an appraiser is subject to the competitive bidding procedures, even
if that person would otherwise be exempted from the competitive bidding
procedures by section 307.86 of the Revised Code; for example, contracts with
accountants, attorneys at law, and consultants. (G) For purposes of this rule and division (F) of section 5713.01
of the Revised Code, the professional services of an appraiser are any
assessment-related services performed by persons who are professional
appraisers and who are on the tax commissioner's list of appraisal firms and
individual appraisers that have created a file pursuant to paragraphs (J) and
(K) of rule 5703-25-08 of the Administrative Code, and which
include: (1) The direct appraisal of real property either for a sexennial
reappraisal, a triennial update, annual maintenance, or for any other special
appraisal contract for the determination of "true value in money" or "true
value" of all real property as defined in paragraph (A) of rule 5703-25-05 of
the Administrative Code, or for the determination of "current agricultural use
value of land" as defined in paragraph (B)(2) of rule 5703-25-30 of the
Administrative Code; (2) The direct appraisal of manufactured or mobile homes
taxed like real property under division (D)(2) of section 4503.06 of the
Revised Code; (3) Preparation and
updating of property record cards, including parcel sketching on any
medium; (4) The use of
computer hardware and software to perform the services listed in paragraphs
(G)(1), (G)(2), and (G)(3) of this rule; (5) Appraisal
consulting services relating to the services described in paragraphs (G)(1),
(G)(2), and (G)(3) of this rule; and (6) The support of
values in administrative or judicial proceedings. (H) For purposes of this rule and division (F) of section 5713.01
of the Revised Code, the professional services of an appraiser do not
include: (1) The sale of computer hardware and software; (2) Any mapping projects; (3) The reproduction of documents, including videodisc
imaging; (4) Any assessment-related services performed by persons who are
not professional appraisers and who are not on the tax commissioner's list of
appraisal firms and individual appraisers that have created a file pursuant to
paragraphs (J) and (K) of rule 5703-25-08 of the Administrative Code;
and (5) Any other services not listed in paragraph (G) of this
rule. (I) Notwithstanding any other paragraph of this rule, no
assessment-related contract is required to be competitively bid if its cost is
not in excess of the dollar limitation contained in section 307.86 of the
Revised Code. This dollar limitation should apply separately to each purchase
or lease only if it may reasonably and in good faith constitute a separate
contract or purchase order. The purchase or lease may not be split into
separate contracts or orders for the purpose of avoiding the competitive
bidding procedures. What constitutes a "purchase" for purposes of section
307.86 of the Revised Code is a question of fact to be determined on a
case-by-case basis.
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